Important Customs news for UK/Eu leatherworkers

[fredk]

About a month ago I was made aware of the new UK customs regulations which will come into effect on January 1st 2021

https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021

Essentially, if a UKer buys goods, up to the value of £135, from outside the UK the supplier must register and pay the VAT on the goods, except if the goods are bought via an on-line market place, eg. ebay, the OMP, which will be liable for collection of the duties

The previous threshold of less than £15 value being VAT/import fees excluded is scrapped and all goods are liable

[Spyros]

So the UK is basically asking everybody to be their tax collector.  No biggie, they only need to hire one more dedicated employee each, for no benefit to them whatsoever, good luck with that.

[Arturomex]

59 minutes ago, Spyros said:

So the UK is basically asking everybody to be their tax collector.  No biggie, they only need to hire one more dedicated employee each, for no benefit to them whatsoever, good luck with that.

Or simply don't sell anything to UK customers.

Jeff Bezos must be piddling himself with glee. Amazon, of course, is one of the "heavy hitters" that can deal with the new tax regulations. How many small vendors that want to sell in the UK will do it through outfits like Amazon to avoid the whole register/remit hassle? Simply strangle the small operators until they fall into line. I'm not really an "Area 51, Second Gunman On the Grassy Knoll" kind of guy (well, actually, I am a Second Gunman On The Grassy Knoll kind of guy) but I could almost see a government/big business conspiracy here.

 

Edited November 18 by Arturomex

[ButtonLady]

4 hours ago, fredk said:

Essentially, if a UKer buys goods, up to the value of £135, from outside the UK the supplier must register and pay the VAT on the goods...

How will this work?  I've sold goods to customers in the UK before (over £15 but under £135) and never encountered VAT.  I knew it existed but figured it was the customer's problem (?).  I read the announcement link, but still don't fully understand.

[Spyros]

3 hours ago, Arturomex said:

Or simply don't sell anything to UK customers.

yeah, pretty much what I meant with "good luck with that"

It's the same as VAT/GST/Sales tax, as a Govt you're basically making everybody collect your taxes on your behalf and pay them to you (with great diligence and accuracy mind you, or else).  You can only do that sort of thing to people if they don't have any other option, but here the option is simple: sell to everyone else but UK.  Some guys will take it, depending how hard they make it.    

[Constabulary]

Well done Boris - Brexit was a great idea for your people and to keep them away from buying "foreign goods" they cannot buy in country. Wondering how many Breixteers were not not aware of this when voting for the leave.

So the thresholds for customs duty liability will it be like before, right?

- Value up to £15 Import - pay no VAT & no Customs Duty
- Value over £15 up to £135 - pay Import VAT but no Customs Duty
- Value over £135 - pay Import VAT + Customs Duty

So Vat is one thing but how will the UK handle custom duty? Do they want the seller to collect them as well. I cannot imagine that. And when the customs already charge the custom duty then why not the VAT? Or is the exception (where sellers have to collect VAT) only the amount between 15 and 135 GBP where they do not charge custom duty?

And Boris wants this to be handled by the seller of goods? Excellent idea. Pretty sure a lot of small business are not willing to do that and will no longer sell to the UK.

And beside of that - how will the UK control this. Will packages go through the customs again and they ask for an invoice showing a valid Vat number and the amount of tax and vat? I think so, right? And what happens when there is no proper invoice (for what ever reason f.i. foreign seller was not aware of the changes) - will they deny the package and it will be returned to sender?

Just recently I had tow cases where a customer form the US bought something from me on Ebay and Ebay or Paypal has charged HIM a small amount of fees. They first put that money on my account and then Paypal takes it from me. So that does not bother and IMO makes sense.

 

[paloma]

I think British consumers will be delighted to know that they are going to have to bear the extra burden of these taxes, as it is certain that salesmen will not give them the gift of taking these new hassles for themselves.

[fredk]

5 hours ago, ButtonLady said:

How will this work?  I've sold goods to customers in the UK before (over £15 but under £135) and never encountered VAT.  I knew it existed but figured it was the customer's problem (?).  I read the announcement link, but still don't fully understand.

1. When you sent the items to the UK, it arrived and went thru the courier's system. They looked up a formula table they have which told them how much import duty and VAT  had to be collected, then they added an administration fee. The courier would inform the customer, 'you have to pay £xx before we can hand this over to you'. After the customer had paid the taxes were paid to HMRC eventually. You never knew of it.

2 The £15 allowance was a cert, but sometimes, actually quite often items worth up to £50 slipped through without taxes being collected. This now stops as everything will be checked

3. Having been in the Eu, anything bought within the Eu going to another Eu country, ie UK, VAT was not collected as it was a common-area trade tax and had been paid already in the country of origin, and as a common-trade area no import taxes were collected either. No longer

4. Some of us in the UK were used to adding the taxes and fees onto items from US, Japan and other places. Basically anywhere from 1.5 x to 2x of the item's price for a guide of what it'll cost on arrival, eg I bought some letter stamps out of US. They cost £31 inc shipping. Taxes etc were £18. = £49

 

[mike02130]

Hmm, in America I've bought items from UK and Europe upwards of $600. and never had to pay any government fees.  If the UK postage wasn't so ridiculously high I would purchase more.  I guess your fees are necessary to pay the Queens 1200 person work staff at Buckingham palace.

[chrisash]

yup but it also pays for the Royal Mail. which works unlike some postal services

[Constabulary]

AFAIK up to $800 its free of custom fees when importing goods to the US.

[Handstitched]

The only way the UK customs would know it was from a business if it had a business name on the package or any BRN''s  ( business reference numbers)  on it. So, if the package looked like it was just an average package , say like a gift, private name ,  or whatever, how would they know ? ( other than large ' business ' `quantities)   

I could send a few belts to the UK  as a " gift'" , with prior arrangements with the client ? 

Much to learn . 

HS 

[Constabulary]

Sending an item as gift does not mean it will not go through the customs. Even low value package may be inspected - they are aware of the "gift thing" - trust me. That would be too easy.

[chrisash]

The part i read was about OMP's which they refered to as "Online market places" so does this mean items brought through companies like Amazon , Alibaba, Etsy and so on, who can all register easily and charge the vat and not necessarily the small retailer who sells direct to the customer

[Handstitched]

2 hours ago, Constabulary said:

Sending an item as gift does not mean it will not go through the customs. Even low value package may be inspected - they are aware of the "gift thing" - trust me. That would be too easy.

All packages go through customs, I appreciate that,  but for example, if I sent you a belt  no invoice  no business  name or ID's with say,  a greeting card, ... with 'Happy Christmas Constabulary '  in the package , how would they know that its actually something you ordered  from my business  in Australia ?  

HS 

[fredk]

2 hours ago, Handstitched said:

All packages go through customs, I appreciate that,  but for example, if I sent you a belt  no invoice  no business  name or ID's with say,  a greeting card, ... with 'Happy Christmas Constabulary '  in the package , how would they know that its actually something you ordered  from my business  in Australia ?  

HS 

You'd need to put a 'Custom's Declaration' label on it declaring it a present. Without the label the package will be opened and examined and HMRC will decide if taxes are liable. If they think you are cheating they will inform Oz post who will prosecute you for fraud.

The US IRS are novices at collecting taxes compared to HMRC, who have several hundred years head start

4 hours ago, chrisash said:

The part i read was about OMP's which they refered to as "Online market places" so does this mean items brought through companies like Amazon , Alibaba, Etsy and so on, who can all register easily and charge the vat and not necessarily the small retailer who sells direct to the customer

Its seems the answer is almost yes; Amazon and ebay, but not etsy which is a sales window.

[chrisash]

I thought Etsy took the payment for the individual just like the others therefore a marketplace, but that's just my reading of how hmrc would apply it