Postal Imports ... Notice 143

I think you may be reading it wrong.

“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”

**LINK**

Vic,

I think you are right, but I cant see how that will work in practice for direct purchases from the far east (ie not from Amazon Ebay etc)- evidenced by the 'something so wonderful will be done to trap the miscreants, that we know not what it will be...' tone of the guidance. It appears to be a work in progress to me.

For it to work as suggested, the likes of AliBaba would have to agree to collect tax on UK sales on behalf of HMRC. I suppose they (and others) might do this off the back of some wider trade deal long term but I cant see them rushing to fall into line just because HMRC say so. I expect AB want to protect their revenue, but the truth is, they could probably buy this entire country out of petty cash, chop it into little pieces and flush it down the pan, without blinking.

Secondly, when a purchase is made from Ali, It has been my experience that a package arrives from a relatively anonymous small reseller / sole trader and there is no obvious link to the OMP on the packaging. Are all these myriads of backroom traders somewhere in the middle of China suddenly going to feel the need to kowtow to HMRC?

I suppose HMRC could take the line that if goods turn up with a declared value but no VAT registration identifier, they would simply confiscate the goods to encourage the others...

I found the Notice quite confusing because it talks consistently about Import VAT when other government sources explain this is gone, replaced by Supply VAT. Now sellers abroad are responsible for collecting UK tax on behalf of HMRC, much as domestic sellers do.

If a UK buyer orders from abroad and the supplier doesn't cooperate, then the tax will be collected on delivery plus a handling charge. Dodging UK tax by buying abroad is made more difficult.

I think more tax will be collected and grey imports discouraged, but it will make it harder for small guys here to buy bargains from small guys abroad. Most likely, small foreign sellers will be forced to sell to the UK through an OMP who sorts out UK tax on our behalf. Could be fiendishly clever or riddled with loopholes. Quite a few advantages to government if it works and other countries may copy the system.

One thing is clear: purchasers are responsible for ensuring their suppliers collect the tax. If the tax isn't collected correctly the buyer is liable.

Dave

That link is old. 3rd Dec, latestes notice I was referring to was dared 22nd Dec.

Robert G8RPI.

This was the original link that Michael Gilligan posted, but his posts have since disappeared;

**LINK**

From subsequent posts, it seems this is out of date. A note to that effect would have been much more useful than the original posts and responses just vanishing...

Edited By Andy Gray 3 on 02/01/2021 22:31:45

When I bought some PCBs direct from China the courier DHL handled the VAT. The VAT was £5, the handing charge was £11

Earlier in the year the government published that VAT free imports for goods to the value of up to £15 would be scrapped and that VAT would apply to all personal imports. I suppose in the space of two weeks they could have changed their mind and have actually increased the VAT free value from the old £15 to £135 but I think that’s a bit unlikely.

From eBay:

“From 1 January 2021, the UK will introduce a new model for collecting VAT on imports.

The changes at a glance

• eBay will collect and remit VAT on orders up to a value of £135 imported into the UK and sold to consumers. There will no longer be a VAT exemption for small consignments up to £15.

**LINK**

Well, I see what the intent is, it is just that the torrent of words is difficult to interpret or understand the practicalities ( dont get bogged down in petifoging detail, just make it happen.....).

I get it now that the < £135 just pushes the tax on small stuff to PoS so is not paid at the border.

As SD states, I suspect all non VAT declared goods or items from vendors not identified as registered for HMRC VAT will be turned over to Royal Mail/AN Other Courier to collect the tax for HMRC and charge the purchaser whatever they like for the service.

In theory most purchases should eventually funnel through the few registered OMPs or privateers that are willing to dance to HMRC's tune because of the extreme handling charge penalty.

Brilliant really, without lifting a finger HMRC extract their extra pound of flesh. But I wonder how many dodgy far east Arthur Daily types will register, collect the VAT, trouser said VAT, then suddenly disappear - Watchagonna do then HMRC - send a gun boat, start another Opium War..?

There is some benefit in that it should deliver some uptick in trade for pukka UK based retailers.

Edited By Martin of Wick on 02/01/2021 23:17:06

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I can still see all the posts that I made, Andy

The discussion has taken a life of its own, so I’m not inclined to post anything further ... but to the best of my knowledge, nothing has been removed.

MichaelG.

All looks the same as when I first saw the original post and no edit lines at the bottom.

I can see them now - must be a problem at my end. Apologies all.

Hopefully it’s not all bad. I used to avoid buying anything with a value over £15 as I knew I would have to pay something like a £10 ransom collection fee on top of any VAT and duty. As I see it I can now buy stuff up to £135 and pay the VAT up front without any further charges. A £20 item should now cost £24 including the VAT. Last year it would have been around £34 including the collection fee. Whether overseas sellers increase the cost of goods for collecting the VAT remains to be seen but will be hard to tell anyway with Covid 19 putting a spanner in the works.

An update on these items. I just received a Post Office card telling me that there is Customs Duty to pay. It amounts to £3.14 (plus of course the £8 post office "handling fee" ) which is 5.2% of the total price (£59.36). No idea how they arrive at that number but - as the items are now £39.58 each on E-bay or £79.16 for the two I guess I am still £8.66 ahead.

Edited By Peter Cook 6 on 04/01/2021 14:45:23

BBC report "Some companies refuse UK deliveries over Brexit tax changes".

Phil

Another thing adding confusion is the new e-commerce rules. Under these a online market place (OMP) e.g.eBay, will be responsible for collecting the VAT. They appear to already be doing this.

If importing directly there should be no import VAT under £135.
I'm pretty sure some sellers will take advantage though.

The eBay guidance also say that in some cases (they don't say what) they will collect VAT on items sold by UK sellers who are not VAT registered! Does this mean 20% on private seller items? Who knows. It does look like HMRC are going to get a lot more income.

Last question, are the ads on the forum an OMP??

Robert G8RPI.

UPDATE:

I have found more: **LINK**

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

MichaelG.

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The low value exemption of £15 has been scrapped. VAT is now payable on everything.

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[ my emboldening ] ...That’s why I started this thread

There is a difference between ‘payable’ and ‘actually collected’

and it appears, from Notice 143, that the system might sometimes work in our favour.

MichaelG.

For clarity, ads on this site are not an 'OMP' as they take you to the sellers own website.

I am daily seeing overseas websites that are either suspending sales to the UK altogether or no longer selling some items to the UK for the time being.

An interesting one is that a major musical instrument retailer in Germany, who have a UK-specific website, have been told by Fender that they can't sell their products to the UK as they only have a European distribution deal.

I think this is going to take months or longer to get sorted out, but it's going to be very hit and miss buying from anywhere abroad now the low value threshold has gone*.

Neil

*I think the main reason for this was that HMRC realised how much VAT and import duty they were missing on items deliberately undervalued and sent from overseas, raher than Brexit.

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Very probably ... and they were not alone ... similar EU arrangements are due to be implemented in July

MichaelG.

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Ref. [one of many sources]

 https://www.ey.com/en_gl/tax-alerts/uk-implements-new-e-commerce-vat-rules-effective-1-january-2021

Edited By Michael Gilligan on 05/01/2021 17:03:29