Evading VAT and Import Duty

Surely the crux is you can't save anything by exempting yourself from the VAT on a VAT-free transaction...

Neil

Evading taxes is not only illegal, it is robbing the rest of us, someone has to pay for hospitals, schools, pensions etc. Yes the tax system is horrendously complicated, that's not HMRC's fault, politicians make the rules. If you want to blame anyone, blame the idiots in Whitehall

Hello Dave W.

Sadly, In truth I doubt whether the establishment will ever change in this country, and certainly not in my lifetime. Not till we are a 'third world' country will somebody sit up and take notice.

Kind regards

Anna

I blame those those who keep voting for them in the hope that "it'll be different this time."

Martin.

Surely the crux is you can't save anything by exempting yourself from the VAT on a VAT-free transaction...

Neil

I'm afraid I will have to 'stomp on' any discussion of how to evade VAT or import duty.

You can't very well stomp on the advice of making several separate purchases, if each item is 'free shipping included". It can sometimes be advantageous to do it that way. Buying heavy items separately, hoping the lighter ones come in duty free is another ploy. One simply has to be prepared to pay the charges, if customs apply them. It's not evasion (and commercial importers would be hammered if they did that) as long as one is prepared to pay if requested/ordered. The alternative is to forego the dlivery, I suppose - and then the mountain of stored items would be a nightmare!

Buying at the busy Christmas period means one is less likely to be charged for marginal VAT, too. Not the recipient's fault if Cusoms are snowed under - they have far bigger fish to catch than Joe Public's odd chinese tool order. Drugs and counterfeit/unsafe goods are just one of several extra loads on them at this time of the year!

Edited By JasonB on 11/12/2017 07:20:08

Sorry Cyrill,

You are wrong in your understanding of what I have said. It was my job to look at legal ways of avoiding tax, in the same way as an accountant does for your taxes. If you go on HMRC site and look at Inheritance tax, even they tell you that they cannot guide you on how to avoid tax - legal terminology. This is for your solicitor to figure out for you. One needs to understand and draw a clear line between the word AVOID and EVADE tax.

Accountants and solicitors exist to help the ordinary man and provide guidance on legal ways to avoid tax... not EVADE tax.

One should only talk about what they know to be true, legal and correct. I too am an 'ordinary guy'. I operate my business legally. If you read this thread, you may understand that at various points, there is discussion on EVADING tax.

With the knowledge I have, should I sack my employees and put them on the dole?, and move my business overseas so that I can get around paying any taxes in the U.K.? This is possible, and this is morally wrong. This country feeds me. I have no interest in pissing on it. My company and I pay our taxes.

If I fail to report discussions on tax evasion, who will?. As I said, if this activity is allowed to grow, there will be more mouths to feed on the dole, and you and I will be standing there as tax payers holding the can, sulking about the state of the economy. Ask yourself then... what did I do about it if and when I had the chance?

What Amazon and eBay are doing is legally and morally wrong in many cases. Please see the Panorama program linked to earlier. But as long as they employ people in the U.K. in some way, the politicians will continue to provide them with incentives and get incentives in return, and turn a blind eye to their methods. If the politicians have the will, HMRC has the way. If and when this will happen, who knows.

Ketan at ARC

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No, Neil ... the crux of the problem is that the builder was not VAT registered; and therefore for the purposes of VAT was an end-user of his purchases. ... The builder would have already paid 20% VAT on the materials, and was not eligible to sell-on at 0% or 5% according to his customer's special circumstances.

... His own services must, of course, have been charged without VAT

The form that Samsandra wishes he had used can only be used to permit a VAT registered builder to charge the lower rate.

MichaelG.

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Further reading:

https://www.gov.uk/government/publications/vat-notice-7017-vat-reliefs-for-disabled-people/vat-notice-7017-vat-reliefs-for-disabled-and-older-people

Edited By Michael Gilligan on 10/12/2017 22:25:05

This country doesn't feed you - you feed it - you don't think you contribute enough already - what makes you think this way?

Has it never crossed your mind, that despite all the 'big talk' from the politicians (over decades) about getting things 'sorted out', they have never quite managed it? Try to look at this 'issue' from a selfish person's perspective (politician) and you'll see that it will never be any different.

Unfortunately you & your business just aren't big enough to lobby the politicians for the kind of change you would like.

Martin.

@Ketan,

Regardless what you do or not do, future will be the same.

Politicians have already decided that goods including engineering goods will be produced in China and sold in the UK. You are barking at private imports which will still continue in millions a month, again regardless are you barking or not, and that is simply because ebay, banggood etc has better lawyers than HMRC and government deep down don't care much about it. Perhaps they have much more important things to do than chasing millions of peoples with 5 pounds tax bills. That would not help to win next election for sure. It would bring no real revenue either. Say there is a million private imports a month, each worth 10 pounds of VAT at average. So annual revenue out of such adventure would be 120 million queeds. For government it is next to nothing and consequences for public relations of overzealous enforcement are disastrous.

Meantime real tax evasion looks like this:

Moped is made in China and spark plug to it is made in China too. Large corpo, formally located in Germany have outsourced some jobs and opened a subsidary in China. This subsidary is in fact independent Chinese company pretending to be subsidary of said corpo. Items (moped and spark plug) are now imported to Germany with drastically underreported value, spark plug is fitted and item sold as "Made in EU". It is all legally fine, because German labor is very expensive and corpo lawyers will prove that it is reasonable to claim 1000 euro of added value for fitting spark plug to moped. Then some money transfers between associated companies are made and managers of both German corpo and Chinese counterpart are both laughing all way to the bank and I assure you that not only mopeds are impotred here within scope of this scheme.

I think it is rather naive to believe that system is *evaded* by bad crooks. It is not. It is *designed* to work this way because it is more rewarding to owners of the system.

System is designed to work for big boys and not for you or me.

It is really funny in fact. Somehow our system have tricked *subjects* to believe that they are *citizens*.

PS. You are also underestimating bargains associated with imports from China. You think, private imports are about evading VAT or a duty but they are not. The latter is next to nil and former makes 1/5 of price difference. However Chinese items are often 2-5-10(!) times cheaper than European made equivalents and increasingly of the same or superior quality.

Martin

This is an example of my last order from China. I made some wood turning tools for some friends a while ago and needed some Torx screws to hold the carbide inserts to the shaft. These Torx screws cost £1.95 EACH plus £2.30 post and packing from most UK dealers. I bought a DOZEN top quality Taiwan made Torx screws with a free flag style driver for £1.95 with free postage from Hong Kong.

@Vic,

My last order from China was worth $ 12 for 0,6m lenght precision stainless ACME leadscrew and a nut (1mm pitch), hardened to 52-6 HRc and of precision required in jig borers and 3D printers.

Beautifuly made product dully came with no additional p&p costs.

Another time I have bought pack of 10 Mitsubishi carbide inserts, again of superior quality to European ripoffs, all for 7 queeds including p&p.

Set of 3 diamond impregnated lapping disks, 6" diameter, again very well made is 12 queeds including p&p etc.

Martin

Note: the uncredited quote, above in bold, is from Neil

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Of course he can't ... and I'm sure he wasn't threatening to.

The £15 threshold is prescribed by HMRC, and keeping the actual customs value of your individual purchases below that threshold is entirely within the rules.

Evasion occurs when a higher value item is mis-declared.

MichaelG.

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Incidentally: ... Although I can't find an authoritative reference for this: I understand that when HMRC reduced the threshold, and included shipping costs in the taxable amount; it was done to target the bulk importation of things like CDs and Printer Cartridges from the Channel Islands. ... Individuals suffered a little as a result, but the 'professionals' were hit hard.

Edited By Michael Gilligan on 11/12/2017 08:57:08

Martin,

There are problems in every country. We live in one such country which has its own baggage. You made me think about the many ways this country has fed me, starting with the basics of free education, great libraries, free nhs, various government help, opportunities and introduction to interesting people who have helped me along the way. The list is too big, so in my eyes, this country has definitely fed me, my employees and our families.

And there is freedom of free speech.

Politicians are of variable ilk in every country. From my personal experience there have been successes and failures when dealing with them. That is life. At least in this country we can speak with them. As a group of small businesses approaching them, the voice gets louder. May be they will listen and may be they wont.

This topic is about tax evasion. If there is tax evasion, even of small amounts, soon they become big....see headline of Panorama program. 'The Billion Pound VAT Scam'. Yes the strap line is sensationalist, and if validated, think about how this effects the free services we receive.

Ketan at ARC.

Hi Vic,

Thats fine. Thats below £15.00 HMRC threshold. As Michael Gilligan has stated:

'The £15 threshold is prescribed by HMRC, and keeping the actual customs value of your individual purchases below that threshold is entirely within the rules.

Evasion occurs when a higher value item is mis-declared.'

What you are describing, if done regularly by the HK supplier, is laundering of dirty money, which is a different worm.

I know for fact, that it is not possible to make and send what you purchased for £1.95. And yes, i do know it is common practice.

Of coarse that is not your problem. I understand that. However, at present, British businesses cannot do anything about that.

Ketan at ARC.

Further to my comment at 08:40:38

Here's an short extract from an article in The Guardian, in 2012 **LINK**

https://www.theguardian.com/uk/2012/jun/26/tax-crackdowns-threaten-channel-islands

[quote]

In March, the islands took the extraordinary step of using British courts in an attempt to stop Osborne closing a loophole in VAT rules for online retailers which is said to be costing the UK exchequer £110m a year.

Amazon, Tesco.com, Play.com and others had been shipping more than £500m of CDs, DVDs and other postable goods to UK customers tax-free from Jersey and Guernsey for almost a decade. The crackdown, Jersey lawyers told the high court, would "result in more than a 50% increase in unemployment, with the consequent social and economic consequences – that is to say, a catastrophe".

The legal challenge was unsuccessful and retailers were blocked from shipping VAT-free from the islands two months ago. Freight levels have plummeted and hundreds of warehouse job losses have followed.

[/quote]

MichaelG.

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Edit: Having refreshed my memory: My original statement "done to target the bulk importation" should probably read "done to target the VAT-free shipping".

Edited By Michael Gilligan on 11/12/2017 09:21:24

Martin Dowing,

You are entitled to your opinion, but regardless of how you dress it, promoting tax evasion via your post on Broaching Set is simply wrong.

Ketan at ARC.

Rules are rules, it doesn't matter how much you disagree with them.

This is why I refuse to go to "car boot" sales. Far too much stolen stuff. It really doesn't take much working out, new or nearly new engineering kit, I dread to think how much is nicked. All to often we see a gloat on forums, about the "bargains". Take a bit of time to think about it.

That is rant for another day....

Jim

If all that stuff is free, then why do we pay tax?..

...Or do you mean it's free once it's paid for it by being taxed?

The Paranoia program you have linked to is there to keep you assured and in the belief that something will now be done. Don't hold your breath is what I say.

Martin.

Hey Martin,

I guess I see the system differently from you. Thats all I can say.

Ketan at ARC.