(Topic ID: 285066)

Sad day for our UK customers --


By G-P-E

23 days ago



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  • Latest reply 8 days ago by Lostcause
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    There are 88 posts in this topic. You are on page 2 of 2.
    #51 20 days ago
    Quoted from Zablon:

    and all the pay places support the buyers.
    I'm still wondering how something coming into customs the guy checking it is going to know if the tax was collected...

    Easy. They open the package and look to see that VAT was collected as a separate line item, and they verify the sellers VAT account number. The onus is on the seller to make sure the correct documentation is provided. Trust me, they do look at these things all the time, based on customer complaints about how much the tax is or that it delayed delivery.

    https://www.revenue.ie/en/vat/vat-records-invoices-and-credit-notes/invoices/what-information-is-required-on-a-vat-invoice.aspx

    -Hans

    #52 20 days ago
    Quoted from cottonm4:

    You are correct. I forgot the PayPal angle.

    Paypal or any credit card - all the same. If the buyer disputes it - they get their money back. The credit cards, just like paypal, yank their money back from the original seller.

    #53 20 days ago
    Quoted from HHaase:

    Easy. They open the package and look to see that VAT was collected as a separate line item, and they verify the sellers VAT account number. The onus is on the seller to make sure the correct documentation is provided. Trust me, they do look at these things all the time, based on customer complaints about how much the tax is or that it delayed delivery.
    -Hans

    Yes, they most certainly do check these. They (Germany, if I remember correctly) even emailed me a nastygram stating that the declared amount on the customs form did not match the value given by my website.. They actually checked values against my website! OK, yes, there may have been a bit of a 'rounding error' on the customs form... Fortunately, it was only a nastygram.

    #54 20 days ago
    Quoted from G-P-E:

    Yes, they most certainly do check these. They (Germany, if I remember correctly) even emailed me a nastygram stating that the declared amount on the customs form did not match the value given by my website.. They actually checked values against my website! OK, yes, there may have been a bit of a 'rounding error' on the customs form... Fortunately, it was only a nastygram.

    Damn.

    How does this work if, say I had way overstocked on some of G-P-E parts and wanted to sell some to a UK contact? Technically, they are still new parts, but since I am not a reseller, aren't they now used parts? Would I get hammered for selling something that is "used" but it is still in the new packaging?

    #55 20 days ago
    Quoted from G-P-E:

    Yes, they most certainly do check these. They (Germany, if I remember correctly) even emailed me a nastygram stating that the declared amount on the customs form did not match the value given by my website.. They actually checked values against my website! OK, yes, there may have been a bit of a 'rounding error' on the customs form... Fortunately, it was only a nastygram.

    Oh god, don't bring up shipping to Germany. Talk about Prussian attention to detail. I cringe whenever I have to ship there because I just know there will be one issue or another that'll either delay things or cost somebody an extra fee.

    At least with Australia I know what's going to happen. Packages almost always arrive within 48 hours of the first email asking "Hey, where's my package?". Never fails.

    -Hans

    #56 19 days ago
    Quoted from cottonm4:

    Damn.
    How does this work if, say I had way overstocked on some of G-P-E parts and wanted to sell some to a UK contact? Technically, they are still new parts, but since I am not a reseller, aren't they now used parts? Would I get hammered for selling something that is "used" but it is still in the new packaging?

    I think this one was the rare, randomly chosen victim for the customs inspection. For my stuff - it has the company name on the return address and always has an accompanying packing list (instead of an invoice like US destinations get). Only including a packing list made it difficult for them to just compare the customs form to an invoice but was still it easy enough for them to look them up on the packing list's website. Yet, they still didn't know what the real sale price was - just enough for them to suspect and send a nasty gram.

    For reselling - I doubt they would care on condition. And as long as the parts aren't used - they're still 'new'. If you hang on long enough - they become 'NOS'. And even longer, you can classify them as 'antiques'.

    #57 19 days ago
    Quoted from HHaase:

    At least with Australia I know what's going to happen. Packages almost always arrive within 48 hours of the first email asking "Hey, where's my package?". Never fails.
    -Hans

    Haha yep this is so true! Recently had some parcels arriving within 3 weeks yet received an envelope yesterday that took over 6 weeks - the longest was almost 3 months but this was mid-last year when there were very few international flights. The good thing is at least they arrive!

    #58 14 days ago

    As this rule impacts on me and from speaking with Steve Young last week, I have some information about this that I got from our U.K VAT people today, which i think might clarify a little better. Perhaps...

    Imported goods: accounting for import VAT
    These are normally charged at the same rate as if they had been supplied in the UK.

    VAT registered businesses can account for import VAT on their VAT return by using postponed VAT accounting. Accounting for VAT on your VAT return in this way allows you to declare import VAT and reclaim it as input tax on the same VAT return. You can reclaim the VAT incurred on the imported goods you own as input tax subject to the normal rules.

    Alternatively a business can choose to pay import VAT on importation. If you choose to do this, you can reclaim the VAT incurred on the imported goods you own as input tax subject to the normal rules. To claim input tax you will need the import VAT statement as evidence. A shipping or forwarding agent cannot usually reclaim this input tax because the goods were not imported to be used in part of their business.

    Valuation of imported goods
    The value for VAT of imported goods is their customs value, determined by the rules in Notice 252, as well as:
    incidental expenses - such as commission, packing, transport and insurance costs incurred up to the goods’ first destination in the UK ;any Customs Duty or levy payable on importation into the UK; any Excise Duty or other charges payable on importation into the UK - except the VAT itself.

    The value of VAT is normally added to box 22 of the import declaration automatically. If it needs to be calculated manually, you must enter the code ‘VAT’ in the rate column of box 47, and enter the value in the amount column.

    As from 1st Jan commercial parcels under £135 do not incur import charges as the vat is now at the point of sale not import and the seller may have consider registering for vat in order to account for this.

    Normally, if you buy parts from the USA they will charge their taxes and when you import the parts you will be charged VAT on the goods. If your not VAT registered, then postal charges on a consignment of goods under the value of £135 will not incur UK VAT.

    Goods that are outside the UK at the point of sale
    The seller must work out the consignment value of the goods by deciding their ‘intrinsic value’, this is the price the goods were sold for, not including: any transport or insurance costs, unless they are included in the price and not separately shown on the invoice
    any other identifiable taxes and charges. Unless sent individually, the seller must add the individual values of all items in a consignment together to get the total value of the consignment.

    If a seller makes changes to the value of the consignment so that its total value goes above £135 they may be liable for import VAT and Customs Duty, and have to adjust the VAT already accounted for at the point of sale.

    Non VAT registered - If the goods in the USA are under the £135 (excluding USA VAT and shipping costs) then so long as they fill in the forms correctly then there is no VAT. If the cost of goods exceed that, you pay VAT on all of the costs when it comes into the UK and you can't recover the VAT.

    If you register for VAT - When you purchase the goods and supply the US business with your VAT number, they charge you their taxes and shipping and when the goods arrive in the UK VAT is charged on the total cost, however you can recover the VAT on the UK import of the goods on your VAT return.
    If you register for VAT then you can recover any VAT that has been charged on the import of the goods. So long as the seller completes the declaration label correctly that will show the value of the goods and you will be charged VAT accordingly.

    I hope this helps a little.

    #59 14 days ago

    In a nutshell -- this is what I have gotten from my shipping software provider:

    ---------------------------------------------------------------------------

    Effective Jan 1, 2021, value added tax (VAT) must be collected for all goods entering the United Kingdom (UK). 

    There will be a 20% VAT rate on goods valued up to £135 (about $180 USD), which you must collect unless your online marketplace (e.g. eBay, Amazon, Etsy, etc.) is already collecting it. Current procedures for goods valued over £135 remain the same. 

    To prevent your UK shipments from being delayed, held, or returned by UK customs in 2021, please take the following steps:  

    1. Register for a VAT number with the UK:  https://www.gov.uk/vat-registration  
    2. Collect VAT at the time of purchase.  
    3. Make quarterly VAT return payments to the UK. 

    ---------------------------------------------------------------------------

    I am not part of an online marketplace so it would be up to me to collect the VAT.
    Several people on my website developer's forum (my website is from UK) are agreeing with this simplified set of instructions. They are modifying the source code to allow collection of VAT up to £135 (currently it is VAT or no VAT with no cutoff threshold).

    Fortunately, there are no taxes collected/paid on any orders other than what I ship locally within Nebraska.
    With two full time jobs - I barely have time for the annual Nebraska taxes and I know I won't have time to process UK taxes.
    So at this time, I'm in a holding pattern waiting for this to either get simplified (e.g. external service) or just go away.

    #60 14 days ago
    Quoted from G-P-E:

    In a nutshell -- this is what I have gotten from my shipping software provider:
    ---------------------------------------------------------------------------
    Effective Jan 1, 2021, value added tax (VAT) must be collected for all goods entering the United Kingdom (UK). 
    There will be a 20% VAT rate on goods valued up to £135 (about $180 USD), which you must collect unless your online marketplace (e.g. eBay, Amazon, Etsy, etc.) is already collecting it. Current procedures for goods valued over £135 remain the same. 
    To prevent your UK shipments from being delayed, held, or returned by UK customs in 2021, please take the following steps:  
    1. Register for a VAT number with the UK:  https://www.gov.uk/vat-registration  
    2. Collect VAT at the time of purchase.  
    3. Make quarterly VAT return payments to the UK. 
    ---------------------------------------------------------------------------
    I am not part of an online marketplace so it would be up to me to collect the VAT.
    Several people on my website developer's forum (my website is from UK) are agreeing with this simplified set of instructions. They are modifying the source code to allow collection of VAT up to £135 (currently it is VAT or no VAT with no cutoff threshold).
    Fortunately, there are no taxes collected/paid on any orders other than what I ship locally within Nebraska.
    With two full time jobs - I barely have time for the annual Nebraska taxes and I know I won't have time to process UK taxes.
    So at this time, I'm in a holding pattern waiting for this to either get simplified (e.g. external service) or just go away.

    But over £135 is ok? So we need to just place larger orders or group then together?

    #61 13 days ago

    As a temporary fix - that would work. Right now - my website won't do min buy per country. I will add a request to them.

    #62 13 days ago

    But does the rule "go away" if you go over the limit? Or do additional regulations kick in?

    -Hans

    #63 13 days ago

    At the £135 point - the collection is then at the point of reception instead of the point of sale.

    However - you then have to worry about whether or not you hit the upper threshold for sales to UK before you again have to worry about VAT.
    For UK - I believe the threshold value is £85K. No... I won't have to worry about that one if true. I am still trying to verify this one.

    #64 13 days ago

    In the US I had to invest in new software, new website platform, ect to work with the new sales tax rules that were placed in effect in 2018/2019. Over all about 35k Kinda a mess to say the least.. Everyone wants more services from their goverments.. they gotta find a way to get the money. Just makes business almost imposable.. My bookkeeper did sales tax about 6-8 hours a month before the rule changes.. Now its over 40 hours because we collect it 9 States, and over 100 jurisdictions. Just in sales tax licenses we pay over $2500 a year

    #65 13 days ago
    Quoted from G-P-E:

    At the £135 point - the collection is then at the point of reception instead of the point of sale.
    However - you then have to worry about whether or not you hit the upper threshold for sales to UK before you again have to worry about VAT.
    For UK - I believe the threshold value is £85K. No... I won't have to worry about that one if true. I am still trying to verify this one.

    How will you get the necessary forms from the UK to do all of this paperwork? Does the UK send you a stack or do you print them from online?

    #66 13 days ago

    All done online. But you have to keep paper copies of invoices and transactions for 6 years.

    #67 13 days ago

    I'm actually considering not shipping to UK.
    Im not collecting or paying vat for them.

    #68 13 days ago

    In respect of the £135 limit, I could not get them to confirm that should a valid VAT number be given to a USA supplier, that they then check and verify ( a simple online check which you could print off for your records, or screenshot it, etc) and then mark the package as a "reverse-charge" meaning the importer pays the VAT just as he would on orders over £135. And that is where the issues lie because smaller orders place the tax burden onto the USA supplier which in turn make USA sales to UK customers unattractive. I shall continue to question them today about this so as to give more clarity.

    #69 13 days ago
    Quoted from G-P-E:

    All done online. But you have to keep paper copies of invoices and transactions for 6 years.

    As you mentioned before EBay takes care of the vat collection. Plus you don’t have to do any separate paperwork for the UK.

    When someone in the UK wants to place an order for <$135, ask for their itemized order via email, and their EBay Id. Create a for sale item that only they can buy, building the EBay fees into their total price. EBay will then add the vat to their order at checkout. This seems like a lot less work than registering for a vat number and filing paperwork with another entity (uk tax office). If a uk customer wants to place an order for $135 or more, have them order through your site, fill out the standard customs form and they can pay vat when they collect the package.

    You don’t have to file any tax paperwork with the UK in either scenario.

    #70 13 days ago
    Quoted from Manny65:

    Australia has done a similar thing 2 (??) years ago however only companies doing more than a certain revenue turnover need to collect the tax. It's to protect local retailers because if I purchase from them I have to pay a 10% Goods and Services Tax (GST), but previously if I went direct to the US supplier I could bring it in without the tax and it'd be cheaper for me. So by taxing anybody bringing in parcels means that the price I pay for goods whether from overseas or local will be similar and the local guys will be able to fulfill the order quicker. Oh and the government picks up more tax revenue
    Given the horrendous shipping costs to Australia, I use a shipping forwarder (as per bluespin post) that can consolidate multiple items and ship me a single parcel saving on shipping multiple items. I have to declare all the goods and value to the shipping forwarder and they collect the tax on behalf of the Australian Government. So if I were to purchase via ebay.com or even Marco (I think) and put in an Australia delivery address they automatically add the Aust tax. Smaller foreign companies don't collect the tax but those items are typically picked up coming into Australia and we are contacted locally to pay the tax.

    #71 13 days ago

    ColourDMD is about the only one I know collecting GST for Australia. If I ship internally and then ship to Australia I avoid this anyway. None of the other places I buy from attempt to collect GST that I’m aware of.

    #72 13 days ago
    Quoted from G-P-E:

    I think this one was the rare, randomly chosen victim for the customs inspection

    I’ve had many packages opened an inspected by customs coming from the states too. Sometimes they even include a form saying that they opened it to take a look see.

    #73 13 days ago

    I didn’t know GPE was a pinsider. To busy trolling I guess. I know who I’m order electronic parts from now.

    #74 13 days ago
    Quoted from Gunnut40:

    I didn’t know GPE was a pinsider. To busy trolling I guess. I know who I’m ordering electronic parts from now.

    #75 13 days ago

    We have formed a partnership with pinball bazaar in the UK where many of our mods can now be purchased. Shipping time is still a factor, but at least I don’t have to deal with the VAT nor do buyers.

    #76 12 days ago

    The latest:

    Shipping to the UK after Brexit 2021

    Starting January 1, 2021, shipping to the UK will be more complex due to Brexit. The UK has implemented new rules for goods imported into the UK. The biggest change is the requirement to collect VAT on shipments to the UK. (I honestly think Brexit is just being used as an excuse for this)
    The UK is taking these actions to ensure that UK businesses are not disadvantaged by competition from VAT free imports. (Wouldn't be VAT free if customs did their job!)

    Failure to adhere to UK Customs procedures could result in:
    • Parcels being refused entry into the UK by customs
    • Parcels being returned to sender (including return shipping fees depending on carrier used)
    • Parcels and products being destroyed (my personal favorite)
    • Parcels incurring major delays in being delivered to buyer
    • Parcels generating additional shipping and/or customs fees, or penalties

    What You Need to Know:
    You Must Register for VAT and Collect VAT Fees
    As a U.S. online retailer, you will now be required to create an online account with Her Majesty's Revenue and Customs (HMRC) and register for a VAT number in order to deliver e-commerce orders to the UK. You will be required to collect all VAT fees from your buyers at time of product purchase. This VAT fee was previously collected when a parcel entered the UK, typically with the buyer having to pay VAT to release the package from Customs.
    VAT rates vary dependent on product price:

    Most Goods and Services valued UNDER £135 have a 20% VAT Rate
    Goods and services shipped to the UK with a value between £0.01 and £135 will incur VAT fee of 20% of the product price not including shipping fees. U.S. online retailers selling products to UK buyers are require to collect this 20% VAT fee at the time of sale. Online retailers will be responsible to pay all VAT collected to HMRC every three months.

    VAT for Goods and Services valued OVER £135
    All shipments with goods and services valued higher than £135 will be subject to the current VAT procedures, which state VAT is payable as the parcels are being imported into the UK. These types of packages are often cleared through customs via parcel consolidators and all applicable duties and VAT will be paid to HMRC directly by the parcel consolidator, who then normally invoices the online retailer.

    What You Need to Do:
    Create a UK Government Gateway Account
    Create an account with Her Majesty's Revenue and Customs (HMRC). This done easily online at: https://www.gov.uk/log-in-register-hmrc-online-services
    Register for a VAT number
    After creating a UK Government Gateway Account, use your Government Gateway ID and Password to register with HMRC for a VAT number: https://www.gov.uk/vat-registration/how-to-register
    Make Quarterly VAT Return Payments to HMRC
    Online retailers must report and pay the VAT Return (taxes) collected from their online sales each quarter to HMRC. You can find your actual deadline inside your VAT online account, but in general the deadline for HMRC’s bank to receive payment is one calendar month plus 7 days after the end of the accounting period (annual quarter). If your VAT Return payment is late, you could be liable for additional late fees.
    To submit your VAT Return, you can use HMRC’s free online service or one of the many commercial accounting software platforms that HMRC has partnered with. The approved software list includes many popular solutions such as QuickBooks Online, Sage Business Cloud and SAP. (I use Sage and this would be a HUGE bump in annual cost for their bugware)
    Your quarterly VAT Return should include key data points for your UK sales such as:
    • Total sales and purchases for your account (only orders delivered to UK)
    • The amount of VAT you owe from your UK sales
    • The amount of VAT you can reclaim (i.e. order returns, product defects)
    • The amount of VAT refund due from HRMC

    #77 12 days ago
    Quoted from G-P-E:

    The latest:
    Shipping to the UK after Brexit 2021
    Starting January 1, 2021, shipping to the UK will be more complex due to Brexit. The UK has implemented new rules for goods imported into the UK. The biggest change is the requirement to collect VAT on shipments to the UK. (I honestly think Brexit is just being used as an excuse for this)
    The UK is taking these actions to ensure that UK businesses are not disadvantaged by competition from VAT free imports. (Wouldn't be VAT free if customs did their job!)
    Failure to adhere to UK Customs procedures could result in:
    • Parcels being refused entry into the UK by customs
    • Parcels being returned to sender (including return shipping fees depending on carrier used)
    • Parcels and products being destroyed (my personal favorite)
    • Parcels incurring major delays in being delivered to buyer
    • Parcels generating additional shipping and/or customs fees, or penalties
    What You Need to Know:
    You Must Register for VAT and Collect VAT Fees
    As a U.S. online retailer, you will now be required to create an online account with Her Majesty's Revenue and Customs (HMRC) and register for a VAT number in order to deliver e-commerce orders to the UK. You will be required to collect all VAT fees from your buyers at time of product purchase. This VAT fee was previously collected when a parcel entered the UK, typically with the buyer having to pay VAT to release the package from Customs.
    VAT rates vary dependent on product price:
    Most Goods and Services valued UNDER £135 have a 20% VAT Rate
    Goods and services shipped to the UK with a value between £0.01 and £135 will incur VAT fee of 20% of the product price not including shipping fees. U.S. online retailers selling products to UK buyers are require to collect this 20% VAT fee at the time of sale. Online retailers will be responsible to pay all VAT collected to HMRC every three months.
    VAT for Goods and Services valued OVER £135
    All shipments with goods and services valued higher than £135 will be subject to the current VAT procedures, which state VAT is payable as the parcels are being imported into the UK. These types of packages are often cleared through customs via parcel consolidators and all applicable duties and VAT will be paid to HMRC directly by the parcel consolidator, who then normally invoices the online retailer.
    What You Need to Do:
    Create a UK Government Gateway Account
    Create an account with Her Majesty's Revenue and Customs (HMRC). This done easily online at: https://www.gov.uk/log-in-register-hmrc-online-services
    Register for a VAT number
    After creating a UK Government Gateway Account, use your Government Gateway ID and Password to register with HMRC for a VAT number: https://www.gov.uk/vat-registration/how-to-register
    Make Quarterly VAT Return Payments to HMRC
    Online retailers must report and pay the VAT Return (taxes) collected from their online sales each quarter to HMRC. You can find your actual deadline inside your VAT online account, but in general the deadline for HMRC’s bank to receive payment is one calendar month plus 7 days after the end of the accounting period (annual quarter). If your VAT Return payment is late, you could be liable for additional late fees.
    To submit your VAT Return, you can use HMRC’s free online service or one of the many commercial accounting software platforms that HMRC has partnered with. The approved software list includes many popular solutions such as QuickBooks Online, Sage Business Cloud and SAP. (I use Sage and this would be a HUGE bump in annual cost for their bugware)
    Your quarterly VAT Return should include key data points for your UK sales such as:
    • Total sales and purchases for your account (only orders delivered to UK)
    • The amount of VAT you owe from your UK sales
    • The amount of VAT you can reclaim (i.e. order returns, product defects)
    • The amount of VAT refund due from HRMC

    Sounds like the easiest way if you want to sell to the UK is to have orders only over 135eu.
    That's what I'm doing at least....

    #78 12 days ago

    It's official; I no longer accept UK orders for as long as this is in effect.
    http://pinball-mods.com/oscom/shipping.php

    #79 12 days ago
    Quoted from jokerpoker:

    ColourDMD is about the only one I know collecting GST for Australia. If I ship internally and then ship to Australia I avoid this anyway. None of the other places I buy from attempt to collect GST that I’m aware of.

    Hey JP - who do you use as a freight forwarder? I use Shipito and they definitely collect the GST

    #80 12 days ago

    thats Ed for sharing this.. Looks like I have to make some changes for some exporters here now too.

    #81 8 days ago
    Quoted from Lermods:

    We have formed a partnership with pinball bazaar in the UK where many of our mods can now be purchased. Shipping time is still a factor, but at least I don’t have to deal with the VAT nor do buyers.

    eh yes you do for anything under £135. James will pick up vat for stuff over that.

    Neil.

    #82 8 days ago

    so I've had about a dozen or so packages from the US under and over the £135 and all is fine.

    #83 8 days ago
    Quoted from NeilMcRae:

    eh yes you do for anything under £135. James will pick up vat for stuff over that.
    Neil.

    No, because he will place a bulk order above 135 pounds so I don’t have to deal with the vat from my end.

    #84 8 days ago
    Quoted from G-P-E:

    Unfortunately, the UK government is driving international sellers away from the UK marketplace.
    It is bad enough that I have to collect sales taxes for local sales but to collect sales taxes for foreign countries is a bit over the top.
    I do not have the means or time to keep track of foreign VAT taxes.
    As a result of their enforcing foreign sellers to collect VAT and send money to the UK - I will have to either enforce a $190 minimum buy or suspend sales to the UK.
    For our UK customers - I apologize in advance, I will not be able to sell to you for the time being.
    https://www.gov.uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk
    Ed Krzycki
    Great Plains Electronics
    www.GreatPlainsElectronics.com

    Welcome to reality, where reality should have been confronted years ago.

    #85 8 days ago
    Quoted from Lermods:

    No, because he will place a bulk order above 135 pounds so I don’t have to deal with the vat from my end.

    What I said

    #86 8 days ago
    Quoted from G-P-E:

    Unfortunately, the UK government is driving international sellers away from the UK marketplace.
    It is bad enough that I have to collect sales taxes for local sales but to collect sales taxes for foreign countries is a bit over the top.

    Would this possibly being used as a way to slow down China ? I mean, you buy something from China from Ebay and it comes with dirt cheap shipping. And dirt cheap prices.

    #87 8 days ago

    I'm still shocked at a 20% VAT..... What...the....hell..... Greedy sumbitches.

    #88 8 days ago
    Quoted from cottonm4:

    Would this possibly being used as a way to slow down China ? I mean, you buy something from China from Ebay and it comes with dirt cheap shipping. And dirt cheap prices.

    Agree and most of it is crap, about time we started making our own stuff again.
    I remember in the 70’s as a kid if a toy was made in China it was going to break in no time.

    VAT pretty painful except the one below

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