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, 2020 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

[Constabulary]

May be helpful:

https://www.gov.uk/guidance/get-your-eu-business-ready-from-1-january-2021

Wondering how it will will be in UK 1 year after Brexit. I don´t think it will be easier / become better. They had a lot of time but I doubt they (UK & EU) have enough time until Jan. 1 to figure out a proper deal. 

If Boris & Co. were a bit smarter (IMO) they should cancel BREXIT or at lest increase the transition time. They should swallow the frog and move on especially due to the pandemic.

Sad story!

Edited December 12, 2020 by Constabulary

[gary]

I recently consulted a government "Get ready for 1st January" document in order to ensure I would be doing the right things to continue to send items abroad.  In the first, introductory, paragraph of seven sentences, outlining the changes, there were five "You may need to ..." , one "You could ..." and one " It is expected that ... "

Not one single, solid confirmation of what will be needed, just some insubstantial guidance that may well change again in the next few days.

Frustrating to say the least.

[chrisash]

We voted to leave and regain our own control of our destiny, whilst the member states of the EU prefer to give control to the federation rather than each state

With this setup it hardly seems possible that the two sides could agree, sovereignty to us means self control and after such a long fight to regain it after being sold down the river, in joining the EU without a vote by the UK people, its not something to give back power to the EU

If the EU demanded the USA followed their rules to get a trade deal, would you expect the US to agree

 

[Constabulary]

The EU for sure needs reformations. No doubt. Question is what price is the UK (Govt.) willing you pay for this bit of more sovereignty? Meaning what does BREXIT mean for the British people and the British economy. Where do most imports (goods and raw material) to the UK come from and where do most exports from the UK go to? If I´m right more than 40% of UK exports go to the EU and more than 50% of imports come from the EU. So VAT & Import fees makes it more expansive for either side. But since the market in the EU market is a lot larger than the market in the UK the EU companies (not meaning Germany alone) may look for alternative trading partners inside the EU. And the UK may look for alternative goods & trading partners as well but the UK is an island so "alternative" goods from non EU countries have to be flown in or shipped by ferry & vessel or trucks have to cross EU countries and go through the tunnel and after BREXIT EU goods have to pass the customs. Trucks will stand on huge parking lots in Kent waiting for maybe several days or so (we do not know yet) until they have been cleared. Not sure how this will work for EU goods shipped by vessel  but I´m sure containers will pile up as well. And all that for sure is a big disadvantage. Not sure if it worth paying that price. May sound like s "rather small price" but I think the Brexiteers have largely underestimated the impacts on trade, economy and jobs. But time will tell...

Edited December 12, 2020 by Constabulary

[chrisash]

Whilst it true the EU is a massive market, I wonder what percentage of our exports go to the newer states (i.e. joined after the common market) i would guess most still goes to the traditional western edge of the EU

The problems on customs etc will take a time to sort out but I assume the UK is looking for the long term not say the next six months

Tariff;s are strange animals after all Trump put up imported sewing machines by 25% yet the price i assume is now seen as normal after what 18 months or so, he has increase imports duty on many EU items over the fight with Boeing, yet apart from the first few days you hear little of it now

 

[Constabulary]

Guess what I just figured.

At least 2 parcel services (GLS & DPD) on my end no longer offer shipping services to the UK. 

May be different for business customers abut still...

[chrisash]

It makes sense for companies to wait now, to see what happens on the 1st,

Someone in the UK cannot bring in a few thousand bottles of French Wine as no transport available for hire to deliver to UK. this was in UK papers yesterday. Both UK container posts full and ships waiting 10 days to get a berth due to companies buying in stock prior to the 1st.

People complaining lack of information, but until a deal is done or not, I guess both sides cannot predict the outcome, as usual all EU matters tend to go down to last few minutes

[Constabulary]

Ouh - Deal!

What will it be...