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UK import taxes for coffee gear post Brexit


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19 minutes ago, Chainlinephil said:

IF £100 is ex vat price  in the country of origin then I understood that the thresholds have been removed for VAT. So you should pay £100 + VAT of 20% on delivery, , that is  collected by the courier who will also charge a handling fee for collecting that (£8 - £10)

There may not be courier charges, this can actually be avoided and probably will be. e.g. you have always been able to buy from Amazon who pay the prevailing TAXs for you, I am pretty sure similar mechanisms will come into force when ordering from Europe. So there should be a mechanism to "prepay the UK TAX".

It's probably all this which means the systems have not been worked through yet....give it a few more weeks.

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Well it's like lots of things the Civil service do...looks good on paper, doesn't always work in reality. Like the time they fined me for having no road tax on an electric car which doesn't need

Wow, this thread turned into a bag of crap fairly rapidly. I have just spent a while removing all the irrelevant comments on the 3 areas concerned. This thread should be about import taxes for co

Yes yes I know, it was the rules until 31 December 2020, now the UK is completely out in the EU and out of the VAT. cooperation that was valid until 31 December 2020. So now all UK orders from UK i

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10 minutes ago, MediumRoastSteam said:

So what's the threshold for? What does the seller or myself have to do differently when buying something for £100 if compared to something for £1000?

From UK Gov. below. Essentially the threshold aligns with customs duty threshold. up to that point VAT/paid at point of sale not point of importation.

The difference between £100 and £1000 is duty may be payable and VAT payable will be payable at point of importation, I think thats where courier comes in and/or held in customs until paid.

Outline of the changes

For imports of goods from outside the UK in consignments not exceeding £135 in value (which aligns with the threshold for customs duty liability), we will be moving the point at which VAT is collected from the point of importation to the point of sale. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments.

The new arrangements will also involve the abolition of Low Value Consignment Relief, which relieves import VAT on consignments of goods valued at £15 or less.

Online marketplaces (OMPs), where they are involved in facilitating the sale, will be responsible for collecting and accounting for the VAT.

 

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3 minutes ago, DavecUK said:

.57

If the cost is less than £135 including EU VAT (for that country) and UK Vat remains at 20%.... then you pay the cost you see minus or plus the difference in the VAT rate compared to our country. So if a European store displays the product price inc VAT, it depends on the country. e.g. For the same item assuming the same ex vat price of 111.57.

£111.57 +23.43 spanish VAT @21% = in Spain it would cost £135

£111.57 +24.55 Italian VAT @22% = in Italy it would cost £136.12

£111.57 +21.20 german VAT @19% = in Germany it would cost £132.77

After Spanish, Italian or German company applying UK VAT of 20% and paying it back to HMRC= 112.5 + 22.32 = £133.89 (your cost in UK in all cases)

For a coffee machine of £1000 inc VAT, it will be devatted at the countries prevailing rate and then you pay 20% UK VAT on the ex VAT amount.

If you buy from different countries, if the machine is the same inc VAT price at their local VAT rate:

£1000 Spanish VAT @21% = 826.45 ex VAT

£1000 Italian VAT @22% =  £819.56 ex VAT

£1000 German VAT @19% = £840.34 ex VAT

In the above case the machine would be cheaper from Italy, because they had the highest local VAT rate and most expensive from germany who had the lowest local VAT rate

 

It's all quite clear really

Thanks. That makes sense. I just don't get why treat a £135 item different from the rest. Why would an Italian business who sells tampers for example, bother to register with HMRC unless the UK is a significant share of their business? It might be that the process to register with HMRC is simple, multilingual process for someone totally alien to it. But I doubt that's the case.

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17 minutes ago, MediumRoastSteam said:

So what's the threshold for? What does the seller or myself have to do differently when buying something for £100 if compared to something for £1000?

The threshold controls where in theory the U.K. VAT is charged.

Below £135 before VAT then the seller, regardless of where they are in the world, is supposed to be registered with HMRC and pay U.K. vat on your behalf. There should then be no charges as it comes into the U.K. (that is the theory and all paperwork needs to be correct to show that).

Above £135 before VAT then the old system where VAT and import duties is charged on arrival into the U.K. applies and then FedEx or similar add their outrageous charges on top for handling it for you!

The first bit was introduced at the same time as Brexit happens but applies to any import worldwide not just the EU, this is the bit a lot of overseas retailers are unhappy about, they have to pay to register and then sort out payments to HMRC.

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2 minutes ago, DavecUK said:

There may not be courier charges, this can actually be avoided and probably will be. e.g. you have always been able to buy from Amazon who pay the prevailing TAXs for you, I am pretty sure similar mechanisms will come into force when ordering from Europe. So there should be a mechanism to "prepay the UK TAX".

It's probably all this which means the systems have not been worked through yet....give it a few more weeks.

I corrected my post Dave. below £135 I think thats right. Mechanisms may be introduced I agree. But duty/tax will still be 'due' at the point of importation however it gets discharged. Below £135 at point of sale. 

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2 minutes ago, Chainlinephil said:

I corrected my post Dave. below £135 I think thats right. Mechanisms may be introduced I agree. But duty/tax will still be 'due' at the point of importation however it gets discharged. Below £135 at point of sale. 

I think even above that, prepayment mechanisms will be used. Easier for you, easier for HMRC, easier for courier firms.

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and yes what AdG said. Thats why many are refusing to ship to us now. 

I think EU will introduce something similar to stop undervaluing of imports  or 'paper' companies in the target country to avoid taxes and lift profits, I gather its a big problem, UK has used Brexit to advance the requirement. In EU likely only to apply to 3rd countries

 

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2 minutes ago, MediumRoastSteam said:

Thanks. That makes sense. I just don't get why treat a £135 item different from the rest. Why would an Italian business who sells tampers for example, bother to register with HMRC unless the UK is a significant share of their business? It might be that the process to register with HMRC is simple, multilingual process for someone totally alien to it. But I doubt that's the case.

I don’t think anyone but the U.K. government think it is a sensible well thought out idea. 

They abolished the old limit (£30?) before tax was applied on imports as part of this and I suspect this they see this as a way of making collecting lots of small amounts of VAT on large volumes of small items someone else’s problem! 


If overseas retailers don’t sign up what happens? Goods get returned to them at our border or we get charged by courier?

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8 minutes ago, MediumRoastSteam said:

Thanks. That makes sense. I just don't get why treat a £135 item different from the rest. Why would an Italian business who sells tampers for example, bother to register with HMRC unless the UK is a significant share of their business? It might be that the process to register with HMRC is simple, multilingual process for someone totally alien to it. But I doubt that's the case.

Because some minions at HMRC thought it would be a good idea, when in reality it simply adds more complexity. it would have been better to set a VAT exemption at say £30, where £30 and below you pay no VAT, you just get the ex VAT price worldwide. Above £30 and you pay VAT. Would have been far simpler, and no funny registrations required. Effectively an extension of the old £18.99 exemption.

Trouble is these people like creating work for themselves and others.

Edited by DavecUK
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1 minute ago, DavecUK said:

Because some minions at HMRC thought it would be a good idea, when in reality it simply adds more complexity.

OK. So it's not only me who thinks this is total nonsense then. That's good news. 😂

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13 minutes ago, MediumRoastSteam said:

OK. So it's not only me who thinks this is total nonsense then. That's good news. 😂

Well it's like lots of things the Civil service do...looks good on paper, doesn't always work in reality.

Like the time they fined me for having no road tax on an electric car which doesn't need road tax. It was the time of the rule change of vehicle tax. I wasn't even aware that I had to dry hump the DVLA system to apply to pay £0.

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On 19/01/2021 at 20:09, DavecUK said:

.57

If the cost is less than £135 including EU VAT (for that country) and UK Vat remains at 20%.... then you pay the cost you see minus or plus the difference in the VAT rate compared to our country. So if a European store displays the product price inc VAT, it depends on the country. e.g. For the same item assuming the same ex vat price of 111.57.

£111.57 +23.43 spanish VAT @21% = in Spain it would cost £135

£111.57 +24.55 Italian VAT @22% = in Italy it would cost £136.12

£111.57 +21.20 german VAT @19% = in Germany it would cost £132.77

After Spanish, Italian or German company applying UK VAT of 20% and paying it back to HMRC= 112.5 + 22.32 = £133.89 (your cost in UK in all cases)

For a coffee machine of £1000 inc VAT, it will be devatted at the countries prevailing rate and then you pay 20% UK VAT on the ex VAT amount.

If you buy from different countries, if the machine is the same inc VAT price at their local VAT rate:

£1000 Spanish VAT @21% = 826.45 ex VAT

£1000 Italian VAT @22% =  £819.56 ex VAT

£1000 German VAT @19% = £840.34 ex VAT

In the above case the machine would be cheaper from Italy, because they had the highest local VAT rate and most expensive from germany who had the lowest local VAT rate

 

It's all quite clear really

Thanks for the summary @DavecUK

Following up with the £1,000 coffee machine example, we would pay the ex VAT price to the overseas retailer and 20% of the value to the HMRC right at the time of delivery? 

Would any further import duties or tariffs apply?

Sound like courier charges / admin fees might also be liable

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There should be no import duties, but at the moment couriers are making charges, due to processing and VAT collection. 

I would imagine when everyone gets their act together, there should be a prepay option and electronic auto clearance, sou couriers don't have to make extra charges.

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@Flamingo - Did you check with the retailer whether they are shipping to the UK? A lot of them are not bothering due to the increase in bureaucracy. 

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28 minutes ago, MediumRoastSteam said:

@Flamingo - Did you check with the retailer whether they are shipping to the UK? A lot of them are not bothering due to the increase in bureaucracy. 

Proof please .........

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6 minutes ago, dfk41 said:

Proof please .........

I'm not talking about coffee retailers specifically. There was an example in the news the other day about a Belgian chocolate retailer, for instance, saying that she wouldn't bother posting to the UK due to increased burden. It's just a good idea to check things before committing to avoid any surprises, that's all. 

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There are examples in the news of many many things, but are they any more than a reflection of the point the editor wants to put over? I do not see exports or imports grinding to a halt. Yes, there are some 'ham sandwich' stories and without a doubt some customs officials are being difficult but ........retailers only make money by selling.......will BMW, Audi, VW etc stop sending us cars because there is additional paperwork? How do we know that the Belgian choclotale story has any foundation at all?

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10 hours ago, MediumRoastSteam said:

@Flamingo - Did you check with the retailer whether they are shipping to the UK? A lot of them are not bothering due to the increase in bureaucracy. 

Not yet. As long as they are ok with selling equipment ex VAT it should be fine I think...

Will keep you posted.

10 hours ago, DavecUK said:

There should be no import duties, but at the moment couriers are making charges, due to processing and VAT collection. 

I would imagine when everyone gets their act together, there should be a prepay option and electronic auto clearance, sou couriers don't have to make extra charges.

Thanks Dave!  

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Right, apologies in advance as I'm thick as feck. 

From these pages I gathered that upon buying from an EU website an item that costs more than £135 ex VAT, then VAT will be collected by HMRC. 

Earlier today, however, I went on a website selling coffee equipment, called coffeedesk.com. I chatted with a lovely lady about purchasing a coffee machine (which is roundabout 400 EUR) from there. She told me that they charge prices including local VAT as they are mandated by law to do so. 

 

If I buy from that website and I pay full VAT, will I be then dry humped by HMRC? What should I do, avoid that website and potentially find others that charge ex VAT?

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@Baffo if they charge you local VAT, which they should actually not do....then the HMRC will collect the UK VAT due, as they don't get a penny of the local VAT. Also, currently, because the Civil service have not yet thought this one through, your couriers will have to clear the package through customs and collect the UK VAT for HMRC and they charge you for the privilege, probably as much as they can get away with e.g. £30 or |£40 on top....so expect to pay £465 gbp all in.

It's not worth buying direct from Europe at the moment until the various retailers, local tax authorities and HMRC get their brains in gear. Once the goods stop flowing then they will put in an electronic tax prepay system....at the moment it's a combination of ignorance, stupidity and brinkmanship on both sides. There is absolutely no reason at all that this complete clustfe*k needs to continue, goods could, and should move freely both ways with electronic prepayment to the countries various VAT systems.

Edited by DavecUK
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5 minutes ago, DavecUK said:

@Baffo if they charge you local VAT, which they should actually not do....then the HMRC will collect the UK VAT due, as they don't get a penny of the local VAT. Also, currently, because the Civil service have not yet thought this one through, your couriers will have to clear the package through customs and collect the UK VAT for HMRC and they charge you for the privilege, probably as much as they can get away with e.g. £30 or |£40 on top....so expect to pay £465 gbp all in.

It's not worth buying direct from Europe at the moment until the various retailers, local tax authorities and HMRC get their brains in gear. Once the goods stop flowing then they will put in an electronic tax prepay system....at the moment it's a combination of ignorance, stupidity and brinkmanship on both sides. There is absolutely no reason at all that this complete clustfe*k needs to continue, goods could, and should move freely both ways with electronic prepayment to the countries various VAT systems.

Thanks Dave. Is there any ETA on when the bunch of "special people" who are responsible/in charge will get this fixed? 

 

I suppose I will brew V60 or moka for a while, between crazy UK MSRP's, crazy UK second-hand prices, getting an espresso machine is hardly a good move for the "money conscious" person.

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There was an article / piece on radio 4 at lunch time regarding this and other items such as parcels

They did mention bands eg £45.  , £150  + 1 other. It all sounded quite confused but NOT good.

Not only could you be caught for VAT but also an import tax ?

I think it could be quite a time before this is sorted out. and then NOT to our advantage.:yuk:

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On 25/01/2021 at 13:46, allikat said:

Big importers won't be affected really, as they'll have mechanisms in place to deal with it. It's the little guy who will struggle.

Agreed - I imagine the cost will either be absorbed or passed on to UK consumers. I don't see the case for jumping through hoops to sell to us if you're a small EU retailer that doesn't have a significant UK customer base.

I'm a pessimist when it comes to this particular mess, but I don't see things changing in the near term. I'm certainly not buying things direct from the continent these days. It's a shame.

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