IMPORTING MODELS FROM JAPAN, USA etc - VAT and DUTY - have I got this right?

[njee20]

11 hours ago, jollysmart said:

 

I just buy straight from the dealer, you can't use Ebay as an arbiter as it has its own rules. Sadly we both have our views and we are unlikely to agree, but if the £135 no tax limit means nothing why is it quoted?

They’re not views, there is a right and a wrong here (you’re wrong), but it’s a bit of a point of pedantry. You seem not to listen, but I’ll try it again in as few words as possible. 
 

VAT is due on everything. 
 

Below £135 it’s meant to be collected by the retailer on behalf of HMRC (so nothing is due to the courier).

 

Above £135 it’ll be collected by the courier, usually the retailer will remove local tax (but they’re obvious not legally obliged to). 
 

So yes, IN GENERAL nothing will be due on transactions below £135 at point of delivery. However this is not “orders under £135 are tax free” as you keep repeating. If HMRC checked a package for a VAT declaration they could entirely justifiably charge you for it. Some retailers will do this - essentially they are complying by declaring to HMRC they won’t collect UK VAT. 
 

To the OP I’d be very confident you’ll have nothing to pay on delivery. However if you are asked for VAT (and the admin fee, which in this instance will be many times more than the VAT) you’ll have to suck it up. 

[jollysmart]

On 02/07/2023 at 21:53, njee20 said:

They’re not views, there is a right and a wrong here (you’re wrong), but it’s a bit of a point of pedantry. You seem not to listen, but I’ll try it again in as few words as possible. 
 

VAT is due on everything. 
 

Below £135 it’s meant to be collected by the retailer on behalf of HMRC (so nothing is due to the courier).

 

Above £135 it’ll be collected by the courier, usually the retailer will remove local tax (but they’re obvious not legally obliged to). 
 

So yes, IN GENERAL nothing will be due on transactions below £135 at point of delivery. However this is not “orders under £135 are tax free” as you keep repeating. If HMRC checked a package for a VAT declaration they could entirely justifiably charge you for it. Some retailers will do this - essentially they are complying by declaring to HMRC they won’t collect UK VAT. 
 

To the OP I’d be very confident you’ll have nothing to pay on delivery. However if you are asked for VAT (and the admin fee, which in this instance will be many times more than the VAT) you’ll have to suck it up. 

 

Thank you for pointing out my error, not saying "essentially tax free" as the assumption is that the VAT will be dealt with by the retailer and as you say  it isn't a matter of views, but of pedantry.

 

However, since your stated view of what will happen closely aligns with what the Government say is the situation and what I and others have stated was our experience,  you and I appear to agree that in the majority of situations no VAT will be collected on packages under £135 which was actually the original question.

 

So pedantry wins.

[Al.]

Paul. 

 

You are liable for import duty of circa 4.7% on the product value and then 20% VAT. However a lot of it depends on how the seller declares the item on the Customs Declaration form, and whether HMRC has sufficient bodies to the item and apply correct duty and tax.

[Jeremy Cumberland]

7 hours ago, Al. said:

Paul. 

 

You are liable for import duty of circa 4.7% on the product value and then 20% VAT. However a lot of it depends on how the seller declares the item on the Customs Declaration form, and whether HMRC has sufficient bodies to the item and apply correct duty and tax.

There's no duty payable when the total value of goods is less than £135, except for goods which are subject to excise duty (alcohol, tobacco, perfume and fuel, for example).

[Andy Hayter]

Stop.

 

We are getting ourselves thoroughly confused here due to incorrect use of language as well as anecdotal stories of not paying VAT.

 

Model railways are classed as toys internationally and have the "toy" tariff code assigned.

 

This code attracts no duty - none - nada.  It does not matter whether the value is £5 or £500.

 

However do beware that you can buy things for your model railway that are not classified as toys and some of these might attract duty.  So for example fine chain, brass section, fine gravel for ballasting might (and I haven't checked the codes) attract duty.

 

So that is duty out of the way.

 

Then there is VAT.  VAT is due on all imports except when the items (for example books and magazines in the UK) attract no VAT.   The £135 limit simply defines how and who pays the VAT.  In the end, you end up paying it as the customer.  It might be directly to the seller if he is registered to collect VAT on behalf of the UK government (other states also included).  It might be to the delivery company who acts on behalf of the seller on importing the goods into the UK if he is not registered.  It might be to the freight forwarder (who more often than not is also the delivery company) if the goods are of higher value (£135).  But whichever way, you will be required to pay it in law and except in the first case of the seller collecting on behalf of the government, you will pay some sort of handling and management charge.   In some cases the demand for payment might even be made after delivery.  So you think you have got away with it only to get a bill several weeks later.

 

The collection of the VAT dues is however very iffy.  An old trick when importing into the UK from the US was to ask the retailer if he could add an old magazine or catalogue to the model railway order and declare it on the manifest.  This meant that there were model items attracting the then current UK VAT plus the paper items that were zero rated.  It seemed that working out the VAT was often too much and goods sailed through without any payment demand - even if payment was due.  

 

Today it seems that it is too time consuming for the companies (under-resourced and not yet held to account?) to reliably collect the VAT that is due.  So some, perhaps many, relatively low value goods go through without any demand for VAT.  This does not mean that you can say that VAT is not going to be collected and certainly not say that VAT is not due.  If you buy from outside your trading bloc always assume that VAT will be due and that it will be collected.   You may get lucky but that is all it is: luck.

 

Even here in bureaucratic France, I know someone who has recently received 4 deliveries from the UK.  All should attract 20% VAT.  On only one was a VAT demand made - though a later demand cannot be discounted even if unlikely knowing the delivery company.  

[TEAMYAKIMA]

As the OP on this, may I thank you one and all for all this information.

 

However, in my particular case I have decided not to buy the item I had planned to buy as economy carriage was 25% more than the value of the item,  but thanks anyway.

[kevinlms]

I have just read a letter (it's from a B.S. Victor - so Victors of London?), where he states

"Japanese manufactured goods need an import licence and are liable to be seized if this is not available".

 

So WW2 restrictions were still in force in 1966! Letter in Model Railway Constructor for January.

 

Also states that models imported from abroad, are subject to 25% duty, plus 10% TCI (whatever that is) and purchase tax on the overall value at 25%.

 

So a good proportion on tax then!

[TEAMYAKIMA]

15 hours ago, kevinlms said:

I have just read a letter (it's from a B.S. Victor - so Victors of London?), where he states

"Japanese manufactured goods need an import licence and are liable to be seized if this is not available".

 

So WW2 restrictions were still in force in 1966! Letter in Model Railway Constructor for January.

 

Yes, I can confirm that Bernard Sydney Victor owned and ran VICTORS of LONDON - I should know, I worked for him for 24 years!

 

I can also confirm that he is still alive and kicking - well certainly alive, I'm not 100% certain about the kicking bit!

[SM42]

I have dipped my toe, for the first time, into the post brexit world of ordering an item from the EU. 

 

 

The fact it is from the EU,  is a fact of geography and  largely irrelevant as the same rules would apply wherever in the wider world I had purchased from. 

 

The total paid was lower than £135  and lower than that stated on the website ( price including VAT) so I am fully expecting a demand for 20% VAT plus any handling fee by the courier as I appear to have paid neither the seller's local VAT rate, nor the UK rate.

 

I factored in these additional potential costs and barring any ridiculous courier fee, I should have saved on the deal compared to purchasing the same item in the UK.

 

It certainly makes you exercise the old grey matter when working out the potential overall cost. 

 

I've never thought of shopping as being a brain exercise before 

 

 

Let's see what happens. 

 

 

Andy

[kevinlms]

27 minutes ago, SM42 said:

I have dipped my toe, for the first time, into the post brexit world of ordering an item from the EU. 

 

 

The fact it is from the EU,  is a fact of geography and  largely irrelevant as the same rules would apply wherever in the wider world I had purchased from. 

 

The total paid was lower than £135  and lower than that stated on the website ( price including VAT) so I am fully expecting a demand for 20% VAT plus any handling fee by the courier as I appear to have paid neither the seller's local VAT rate, nor the UK rate.

 

I factored in these additional potential costs and barring any ridiculous courier fee, I should have saved on the deal compared to purchasing the same item in the UK.

 

It certainly makes you exercise the old grey matter when working out the potential overall cost. 

 

I've never thought of shopping as being a brain exercise before 

 

 

Let's see what happens. 

 

 

Andy

The price difference comes down to that a retailer, MUST pay any VAT, Duty or other costs, whereas you as an individual importer MIGHT not.

[fulton]

When ordering from outside the UK, also remember to add in the currency conversion fee, I factor in all the costs, the item, postage, VAT, handling fee and currency fee, if it still makes sense I order, never (fingers crossed) had a bad experience, if I end up not paying VAT that is a pleasant bonus for me.

[SM42]

The currency exchange fee is not relevant as my credit card provider does  not charge one. 

 

With the good price initially including  German tax, it got better with German tax deducted and was still a good price when adding  in postage, and 20% UK VAT on the bottom line. 

 

The courier fee is the only unknown, ( I'm too lazy to look it up)  but unless that is extortionate, I should still come in with a bargain.

 

It was actually quite nice to find the retailer had deducted sales taxes ( at least they are doing something right) and it appears either they didn't add UK VAT and hence are not registered with HMRC, or there is quite a difference in tax rates.

 

Unfortunately I do not know the current rates in order to work out whether they have included UK  taxes and I really couldn't be bothered to look it up.

 

I'll see what happens when it arrives.

 

 

Andy

[phil-b259]

Model railway products ARE TARIF FREE THROUGHOUT THE WORLD!

 

Import fees / tariffs are determined by the World Trade Organisation and NOT the EU*

 

It doesn’t mater where you buy them from there are ZERO customs /import fees to pay on model railway items.

 

On the flip side though VAT is payable on ALL imports - again it makes sod all difference whether the items are coming fro the EU or not!

 

The only thing which changes is that for shipments below £135, IF the seller is ‘VAT registered’ with HMRC then the seller may charge you the VAT at point of sale and providing this is recorded correctly on the shipping documentation then the buyer will only pay shipping costs.

 

Now given the quantity of parcels being sent and general confusion it is the case that sometimes folk get stung for VAT twice - but others can find their parcels come through the system without attracting the VAT charge which they should. But none of that changes how the system SHOULD work - which is the same with respect to model railway items regardless of where in the world they come from.

Edited July 11, 2023 by phil-b259

[Hal Nail]

apologies for the diversion but if a uk company uses a non vat registered italian supplier for tv production services, is there vat involved?

 

asking for a friend :)

[SZ]

22 minutes ago, Hal Nail said:

apologies for the diversion but if a uk company uses a non vat registered italian supplier for tv production services, is there vat involved?

 

asking for a friend :)

 

Services are treated differently to goods as they are intangible.

 

I think services provided in Italy to a UK company by an Italian company are subject to the reverse charge procedure. That means the Italian company does not charge VAT (Italian or UK) but instead the UK company enters an amount equal to the UK VAT on each side of its UK VAT return. So the UK company pays it and reclaims it at the same time.

 

Google the bit in bold.

[melmerby]

BTW

AliExpress are required by HMRC to charge UK VAT on items shipped to the UK, including postage.

 

Presumably their large turnover of goods to the UK has prompted HMRC to act.

Edited July 11, 2023 by melmerby

[phil-b259]

On 11/07/2023 at 18:48, melmerby said:

BTW

AliExpress are required by HMRC to charge UK VAT on items shipped to the UK, including postage.

 

Presumably their large turnover of goods to the UK has prompted HMRC to act.

Or more like Amazon and E-bay have complained they are at a disadvantage

 

The legislation is VERY clear - online marketplaces are expected to collect any VAT that is due and pass it on to HMRC being based in China does not mean you cannot by-pass the rules forever.

[kevinlms]

7 hours ago, phil-b259 said:

Or more like Amazon and E-bay have complained they are at a disadvantage

 

The legislation is VERY clear - online marketplaces are expected to collect any VAT that is due and pass it on to HMRC being based in China does not mean you cannot by-pass the rules forever.

What happens if they chose to ignore the law?

[Jeremy Cumberland]

There is clearly an element of wishful thinking in some of the guideance from the British government. When you read some of the immediate post-Brexit documents, for example, there was clearly an expectation that EU businesses selling directly to consumers in Britain would register with HMRC for VAT, and then charge UK VAT on items exported to Great Britain (where previously they just charged domestic VAT irrespective of which EEC country the goods were being sold to). However, the only incentive for European businesses to do this was to make life simpler for their British customers, but this only applied where goods were valued at less than £135. Not surprisingly, many European businesses selling directly to British consumers haven't registered for UK VAT with HMRC.

 

Online marketplaces based in Britian have to comply with British law, of course, and so we should have no problem buying through amazon.co.uk or ebay.co.uk, who should collect VAT (though I haven't checked either for items that clearly come from abroad). I can't see any compulsion for online marketplaces based overseas to do anything at all, and AliExpress appears not to have a British presence. Perhaps they collect VAT, perhaps they don't. If they don't, then VAT will be collected via the delivery company (or perhaps not, for items valued at less than £135 - see many previous posts). I can find nothing on their website that mentions VAT.

[Michael Hodgson]

On the news this morning it was announced that the UK has signed a treaty to join an internatioanl trade partnership called the CPTPP, which includes the Japan - the OP's country of supply - Australia, NZ, Canada, Mexico and some other Latin American and Far eastern countries; China & Taiwan have also applied to join, though China is unlikely to be accepted.  The USA was going to join, but Trump stopped it and Biden doesn't seem to want to reverse that.  The EU is not part of CPTPP but many CPTPP members have a trade agreement with the EU.

 

I'm not clear what implications this has for modellers, but it is claimed that it would (gradually) improve exports of the countries concerned by cutting tarriffs.  

 

 

[bécasse]

It is unlikely to have any practical effect at all so far as model railway items are concerned. VAT - and more importantly the associated handling charge - will still be due. In my experience with buying items from the UK into Belgium it is the fixed handling charge that dominates the additional costs on most items.

 

If one buys items from overseas through the domestic website of Amazon or Ebay, they do add and charge the relevant VAT on the base price but one then has nothing more to pay to receive the item making the total cost almost inevitably lower (and often a lot lower) than a do-it-yourself purchase from overseas.

[njee20]

2 hours ago, Jeremy Cumberland said:

There is clearly an element of wishful thinking in some of the guideance from the British government. When you read some of the immediate post-Brexit documents, for example, there was clearly an expectation that EU businesses selling directly to consumers in Britain would register with HMRC for VAT, and then charge UK VAT on items exported to Great Britain (where previously they just charged domestic VAT irrespective of which EEC country the goods were being sold to). However, the only incentive for European businesses to do this was to make life simpler for their British customers, but this only applied where goods were valued at less than £135. Not surprisingly, many European businesses selling directly to British consumers haven't registered for UK VAT with HMRC.

 

Online marketplaces based in Britian have to comply with British law, of course, and so we should have no problem buying through amazon.co.uk or ebay.co.uk, who should collect VAT (though I haven't checked either for items that clearly come from abroad). I can't see any compulsion for online marketplaces based overseas to do anything at all, and AliExpress appears not to have a British presence. Perhaps they collect VAT, perhaps they don't. If they don't, then VAT will be collected via the delivery company (or perhaps not, for items valued at less than £135 - see many previous posts). I can find nothing on their website that mentions VAT.

AliExpress applies VAT once you add things to your basket. It’s very clearly shown, I applaud their transparency. 
 

A lot of EU (particularly German) based cycling retailers (including some that had gone to the effort of having .co.uk domains, such was their perceived market) simply stopped selling to the UK entirely post Brexit. So I would rather assume that’ll be the broader outcome if HMRC start ‘enforcing’ their rules. I think it’s a bit of a sad state of affairs they believe they can actually make such demands of small retailers thousands of miles away. 

[melmerby]

2 hours ago, Jeremy Cumberland said:

Online marketplaces based in Britian have to comply with British law, of course, and so we should have no problem buying through amazon.co.uk or ebay.co.uk, who should collect VAT (though I haven't checked either for items that clearly come from abroad). I can't see any compulsion for online marketplaces based overseas to do anything at all, and AliExpress appears not to have a British presence. Perhaps they collect VAT, perhaps they don't. If they don't, then VAT will be collected via the delivery company (or perhaps not, for items valued at less than £135 - see many previous posts). I can find nothing on their website that mentions VAT.

AliExpress are registered to collect UK VAT and it will be added to the price you pay. (Company number 06721521, VAT Number: GB976354675)*

They also have a UK website where everything is priced all inclusive, but the range of goods so far is somewhat limited  (and still generally shipped from outside the UK)

 

AliExpress is a trading name of AliBaba.com and they have a registered company in the UK.

 

*EDIT

Although I'm not sure that's the correct VAT Number as I have found another one under the same company details.

 

 

Edited July 16, 2023 by melmerby

[jjb1970]

Requiring overseas sellers to collect sales tax on international sales is increasingly the norm and the UK is hardly out of step in doing it. Even Singapore (less than a tenth of the UK population has a similar rule for GST). It is what it is and some governments have been very open that it is as much (if not more) about protecting domestic sellers from cheaper competition as about revenue collection.

 

For the OP, who asked a reasonable question, it depends on value but the seller should make clear whether or not VAT has been charged. If not (their UK sales are too small or value outside the threshold then budget for 20% plus a handling charge. If in doubt, ask. All the major e-commerce platforms seem to comply with the requirements imposed by various countries. Since the OP is asking about models from Asia and America, Brexit is irrelevant to his question. My own experience (like the OP I like Chinese trains, and am an enthusiast of Japanese trains) was painless and I had zero problems. Delivery from Japan always tended to be very quick, China less so but not bad.