VAT question.

[JimF51]

Not sure if any one where would know, but thought I would ask. And yes, I have emailed 2 dealers in the UK, but haven't had a reply yet.

 

Is VAT applied based on where the item will be shipped to, or where the purchaser lives? It has been subtracted from the price of things I have bought, and had shipped to my home address in the US. What I am considering is have some items shipped to a friend in the UK, who is planning a trip here in the not too distant future. She is willing to bring said items with her, saving me postage.

 

Thanks.

 

Jim F.

[Andy Hayter]

VAT is payable on the basis of the ship to address.  So a sale to the US should be VAT free, but a sale to a UK address will attract VAT - even if the model is subsequently exported, unless the person doing the exporting is moving "permanently" outside EU, the item was purchased 6 months or less before export and the seller belongs to the scheme that allows repayment of the VAT on export - which frankly is unlikely for any model retail business. 

 

Edit to add:  And in the last example of reclaiming VAT, I am almost certain that the person doing the exporting has to be present at the point of sale - which would exclude any mail order sales

[kevinlms]

The saving of the VAT, will almost certainly be greater than the postage, so just get it posted to yourself in the US (or a friend/neighbour etc) and have fun opening the parcel on arrival home. Its much easier, unless you buy small items.

The problem is simple, the seller is responsible for paying his/her VAT, unless they can prove the goods have left the country. Proof of overseas postage, is a valid proof. Giving it to a 'friend of a friend', who is planning to leave the country later, taking the goods, isn't sufficient proof!

[mjkerr]

I assume this is your plan :

a friend is travelling from the UK to USA
you are purchasing the items new in the USA
you are then going to give them to this friend that is travelling from the USA to the UK

This friend will be subject to the normal import restrictions when arriving in the UK
This includes personal goods up to the value of £390 (currently $575)

So long as the items don't look to be of a commercial nature I can't see there being a problem
 

I regularly fly British Airways World Traveller Plus, this gives me a baggage allowance of :
computer bag, hand luggage, and two 23KG luggage
I fly out with one large suitcase inside a very large suitcase, and one holdall (which is then disposed of in the USA)
On my return I then have these suitcases available separately

This allows me to travel out with essentials and clothes, the clothes are then disposed of, and return with personal goods and gifts
The excess for this second piece of luggage would be £140 each way, so this £280 is effectively put towards this upgrade

Your friend could to this same practice, or you could purchase a cheap sturdy suitcase (although they are cheaper in the UK) and pay their excess for this additional piece of luggage

 

Last year (2014) we had one suitcase stopped by Customs and Excise, but after sending them a copy of the Currnecy Card statement from when we were in the USA the suitcase it arrived the following day without any further action, other than a leaflet added to the inside of the suitcase outling the import restrictions (relating to tobacco and alcohol) and a letter outlining why the suitcase had been delayed
Ironically, we received compensation from British Airways for its delay!

[JimF51]

mjkerr, no, a bit different. I am in the US, and would be buying from UK shops. If VAT was based on buyer's address, would pay UK postage to frind, she would then bring items with her to US when she comes over. There is no custom duty for UK model railway items coming in over here, as nothing equivalent is made or distributed here.

 

My primary reason for asking was that since I am now going to have to work in N to do any UK modelling at all, paying postage on a large package of small orders bought over time would be less costly than postage on numerous small orders. 

 

Jim F

[brianusa]

I assume this is your plan :

a friend is travelling from the UK to USA

you are purchasing the items new in the USA

you are then going to give them to this friend that is travelling from the USA to the UK

 

This friend will be subject to the normal import restrictions when arriving in the UK

This includes personal goods up to the value of £390 (currently $575)

So long as the items don't look to be of a commercial nature I can't see there being a problem

 

I regularly fly British Airways World Traveller Plus, this gives me a baggage allowance of :

computer bag, hand luggage, and two 23KG luggage

I fly out with one large suitcase inside a very large suitcase, and one holdall (which is then disposed of in the USA)

On my return I then have these suitcases available separately

This allows me to travel out with essentials and clothes, the clothes are then disposed of, and return with personal goods and gifts

The excess for this second piece of luggage would be £140 each way, so this £280 is effectively put towards this upgrade

Your friend could to this same practice, or you could purchase a cheap sturdy suitcase (although they are cheaper in the UK) and pay their excess for this additional piece of luggage

 

Last year (2014) we had one suitcase stopped by Customs and Excise, but after sending them a copy of the Currnecy Card statement from when we were in the USA the suitcase it arrived the following day without any further action, other than a leaflet added to the inside of the suitcase outling the import restrictions (relating to tobacco and alcohol) and a letter outlining why the suitcase had been delayed

Ironically, we received compensation from British Airways for its delay!

 

In a similar vein, from the US I sent a Hornby O gauge loco back to one of the UK repair men and had the most difficult time.  Before it would be delivered, there had to VAT and customs to be paid which meant I had to make arrangements for relatives in the UK to send on the extra as the repair man didn't take CC or PP.  It was clearly marked For return and Repair on the Customs Form to no avail.  The value certainly wasn't that much but the whole process was a disaster.  Is there any way this can be avoided as I need to send another back, but not with this situation again.

 

Brian

[mjkerr]

mjkerr, no, a bit different. I am in the US, and would be buying from UK shops. If VAT was based on buyer's address, would pay UK postage to frind, she would then bring items with her to US when she comes over. There is no custom duty for UK model railway items coming in over here, as nothing equivalent is made or distributed here.

Swings and roundabouts then

 

Option 1 is to purchase in the UK and claim back the VAT

However, you will most likely encounter retailers that won't send to the USA or will be extremely expensive

 

Option 2 is to pay this friend to carry these in a suitcase

At the moment one additional 23KG suitcase is £140 excess, with British Airways

[corneliuslundie]

The cheapest way would be to get your friend to buy the goods for you and keep the receipt. Then at the airport he/she can go to an office there and complete a form to claim the VAT back. The six month rule and others above apply. A friend of mine who lives outside the EU did that for a computer while visiting the UK. It was a hassle and the money took some time to be refunded, but it worked.

 

And yes, importing things from a seller in the USA to the UK attracts not just VAT on the price and postage but also a hefty administration charge for anything over a very small value.

[Andy Hayter]

Sorry but no. 

The person who would be exporting the goods lives in the UK and therefore cannot use this route - hell, everyone taking a holiday in Miami could claim back the VAT on their digital camera if it were as you describe.

In your example where it has happened, the person doing the exporting lives outside of the EU.

[highpeak]

mjkerr, no, a bit different. I am in the US, and would be buying from UK shops. If VAT was based on buyer's address, would pay UK postage to frind, she would then bring items with her to US when she comes over. There is no custom duty for UK model railway items coming in over here, as nothing equivalent is made or distributed here.

 

My primary reason for asking was that since I am now going to have to work in N to do any UK modelling at all, paying postage on a large package of small orders bought over time would be less costly than postage on numerous small orders. 

 

Jim F

I'd imagine the Customs people will assume anything your friend is bringing into the country is a gift from her to you. Non-residents bringing items to the US have a $100 duty-free exemption. I am not sure whether she would be able to claim she was simply acting as a courier for you and that you had bought the merchandise she was carrying. Might be an interesting chat with CBP.

The absence of customs duty probably applies to stuff being shipped from the UK to a US resident. I've had a lot of stuff shipped over the years and never had to pay customs duty on it. Sales tax of course is a state matter, not federal. Whether or not you 'fess up to the state and pay the sales and use tax is between you and your conscience.

It's a shame there aren't more opportunities for one-stop shopping such as Dave Cleal used to provide, at least in 4mm scale, to avoid a lot of separate shipments.

I hope that British Airways baggage charge is round-trip!

[doctor quinn]

The US Harmonised Tariff seemsd to suggest that all model trains aren't subject to import duties, just like imports into the EU. Of course VAT is applied at importation in the EU.

 

Nick

[Junctionmad]

In a similar vein, from the US I sent a Hornby O gauge loco back to one of the UK repair men and had the most difficult time. Before it would be delivered, there had to VAT and customs to be paid which meant I had to make arrangements for relatives in the UK to send on the extra as the repair man didn't take CC or PP. It was clearly marked For return and Repair on the Customs Form to no avail. The value certainly wasn't that much but the whole process was a disaster. Is there any way this can be avoided as I need to send another back, but not with this situation again.

 

Brian

There is a relief from vat for items sent into the EU for repair that will be then re-exported. It's called inwards processing relief. Unfortunately the receiver has to opt into the system and its impractical for small value items.

[highpeak]

The US Harmonised Tariff seemsd to suggest that all model trains aren't subject to import duties, just like imports into the EU. Of course VAT is applied at importation in the EU.

 

Nick

You are correct, there is indeed a category for "our" stuff, category 9503.00.00 'reduced-scale ("scale") models and similar recreational models, working or not' which should cover most stuff, and the duty rate is zero (unless it was made in Cuba or North Korea.) I like how they put "scale" in quotes, maybe they've read some of the threads on here.

It's still not that easy to work out what Customs and Border Patrol will do when you hand over your declaration though. They start off suggesting that you have an allowance of $800 (resident) or $100 (non-resident). It requires a bit of joining up the dots to try to see what they will do if you are over that limit.

In calculating what you might owe, they talk about "subtracting the value of duty-free" goods form the total value of what you are bringing in. This  should, based on the Harmonized Tariff, get the model stuff in without paying duty even if it goes over $100. In turn, using the Harmonized Tariff for duty calculation is mentioned elsewhere in a section dealing with residents, although they also talked about a flat-rate percentage.

You might have a bit of a discussion with CBP if they do decide to open your bags, though they rarely seem to do that if you look vaguely respectable. If you come in to the country looking like a hippy which my daughter did once, you may well have your bags opened and a lot of stuff like bottles of shampoo checked quite closely, but I don't think they are worrying about collecting duty. I've never had my bags checked by the US in nearly 40 years of coming and going.

[Dazzler Fan]

+

Basically C&E are a law unto themselves - if they want to classify and value something it is their prerogative.

The minimum value threshold for VAT was set in 1988 and needs revising for inflation: write to your MP.

 

+

[kevinlms]

+

 

Basically C&E are a law unto themselves - if they want to classify and value something it is the prerogative.

 

The minimum value threshold for VAT was set in 1988 and needs revising for inflation: write to your MP.

 

+

The current push in Australia is to LOWER this threshold, not increase for inflation.

[mjkerr]

I'd imagine the Customs people will assume anything your friend is bringing into the country is a gift from her to you. Non-residents bringing items to the US have a $100 duty-free exemption

I hope that British Airways baggage charge is round-trip!

On my last few trips I have taken personal goods worth vastly more than $100 into the USA

Equally, by some of the luggage others (in World Traveller Plus and Club World) were carrying they don't appear to enforce this!

No, that is the current British Airways excess on all non-EU flights, and one of the reasons it can be just as good value to upgrade from World Traveller to World Traveller Plus

[highpeak]

I have to say I can't recall the last time I saw anybody have their bags opened by Customs at an airport in the US. That $100 exemption seems very ungenerous and had probably not been touched for quite some time, though I think the resident exemption has gone up in the last few years.

I think CBP is more interested in illicit substances than whether somebody is bringing in more than $100 worth of assorted trinkets. They always looked extremely bored although passport control usually manages a "welcome home" which is more than I get when entering the UK (I travel on a UK passport).

 

That baggage charge is extortion. The excess baggage charge on the US carriers I've used, at least for travel starting in and returning to the US, is $100 each way, which is itself a rip-off. I manage to cram everything I need into one bag/carry on. I no longer consider British Airways as they withdrew direct service between Manchester and the NY area, and I have no desire to go anywhere near Heathrow or Gatwick.