New VAT rules mean websites worldwide no longer selling to UK customers

[Ian Adams]

It's more convoluted than just "VAT" ...

I am trying to buy a StenLight caving lamp from the USA. "Sten" itself will not sell to individuals but, instead, direct you to a small  number of USA retailers.

I specifically waited until after we left the European Union so I would not have to pay the import tax (not VAT) which is charged on US Imports (this is a new trade deal we agreed while Theresa May was PM and Donald Trump was president).

I realise American Politics are more polar than UK Caving access rights and  so I have been trying to act quickly.

Unfortunately, the two US retailers I have been contacting do not return my messages.

It is clear we are in a time of "trade change" and until the "process" settles down, some of us may become frustrated.

Generally speaking, businesses don't cut off their own noses and usually (even with teeth gritted) they will do whatever they need to do to preserve their income.

Ian

 

[andrewmcleod]

I have never seen a customs form for something off Ebay from China. Small value or not. I can understand the frustrations.

Everything I've ever ordered off eBay that has come from China/Hong Kong etc (which I generally avoid) has had a CN22 type customs form attached. However, it has generally (illegally) declared it as a low-value gift with some arbitrary value of $5 or whatever to keep it under the threshold, regardless of the actual value of the item (even if the item is below the threshold anyway).

The tricky bit is that it is probably me, as the importer, that is committing an offence by not having paid VAT/import duties... fortunately I don't think I've ever ordered anything above the threshold (I try quite hard to get stuff posted from the UK, even if it's come from China, to avoid the customs faff and hopefully get VAT paid).

 

[cseal]

...

Maybe our government and avalara need to get together?
https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

Note my link is "gov.uk"

Yes - a totally useless gov.uk page; telling you the old rules with a big important caveat at the beginning of page! :-|

 

[ttxela2]

Perhaps not directly related but we ship biological material to Europe on dry ice for use in online training courses.

So far this calendar year not a single shipment has arrived without issue, either delayed, lost or returned to us. We've tried shipping earlier and stuffing ever more dry ice in to try and overcome this but there is a limit to how early we can ship and if the stuff arricves defrosted it's no good and obviously if it arrives after the training is scheduled its also no good.

 

[royfellows]

...

Maybe our government and avalara need to get together?
https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

Note my link is "gov.uk"

Yes - a totally useless gov.uk page; telling you the old rules with a big important caveat at the beginning of page! :-|

Yes, its easily missed.

The current page:

https://www.gov.uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk

 

[royfellows]

Yes, I stocked up in Dec to beat the Chinese New Year and possible delays. I have just bought a batch of LEDs that i use a lot of, no problem.

I think you are going to the wrong shop.

For LEDs LiIon cells (shipped overland and delivered by courier), and general stuff, use fastech
https://www.fasttech.com/

There are a good range of drivers, many without the stupid flashes, at kaidomain. I ordered some stuff on the 2nd and no issues, I am busy putting in garden lights!
http://kaidomain.com/

DX dont really go in for stuff like LEDs and that, poor supplier anyway, no big loss.

 

[cseal]

Yes, I stocked up in Dec to beat the Chinese New Year and possible delays. I have just bought a batch of LEDs that i use a lot of, no problem.

I think you are going to the wrong shop.

For LEDs LiIon cells (shipped overland and delivered by courier), and general stuff, use fastech
https://www.fasttech.com/

There are a good range of drivers, many without the stupid flashes, at kaidomain. I ordered some stuff on the 2nd and no issues, I am busy putting in garden lights!
http://kaidomain.com/

DX dont really go in for stuff like LEDs and that, poor supplier anyway, no big loss.

True - I haven't really used DX in some years but it's a non-EU website I checked when I looked around to see the scale of the problem.  I'm more disappointed about not being able to purchase from MTN Electronics and some EU businesses that now refuse to sell to the UK customers.

So do you know if Kai and Fasttech now add 20% VAT before selling to you and they pay it direct to HMRC? That's my reading of the new law (or perhaps they're contravening UK law and EU law after June'21) i.e. they must register with HMRC unless
- it's a business-to-business transaction i.e. you're a UK VAT registered business
- they have UK import business themselves e.g. UK warehouse.
- or possibly if the order is more than ?135 - I still not sure about this i.e. whether they still need to register with HMRC even if VAT is collected on import.

 

[royfellows]

I dont know.

This is from Fastechs website:

Because FastTech sends products from Hong Kong (a free port), there is no sales tax or duties imposed by the Hong Kong government. Customers do not have to pay any sales tax or export duties when they purchase from FastTech.

Statistically, well less than 1% of all orders have ever got opened by the Customs in customers' home countries. If a package were to be checked by the customs office of the customer's country, customers have to cover for import duties, tariffs, and taxes.

Although the chance of packages assessed by the customs is small, FastTech encourages customers to check with their local customs office for potential import taxes, duties, and tariffs, prior to placing an order. In addition, some products may require special licenses or permits to import (such as high powered lasers). FastTech is not responsible for products confiscated by the customs in customers' countries.

ENDS

I agree about their 1% - but from now on who knows. I have received a package on the 20th which was posted from the Netherlands and delivered by Royal Mail.

 

[Stuart France]

As I understand it, the new import tax regime problem is EU-wide, including the ex-EU bit of the EU which is us.

First, the right answer to dealing with evasion of taxes by such as Lux-based suppliers is to tax the profit of these mega-companies based on their notional profit in each country of delivery, which is one tax return transaction per quarter or per year for the big supplier to deal with, and not to create millions of small tax transactions for all of the little buyers to deal with instead.  Too easy for politicians and HMRC type bodies, I know.

So the EU has a 150EUR threshold per packet (the UK has it at 135GBP) above which the supplier does NOT have to collect the delivery country's VAT on the transaction which would imply registering for VAT in 27 foreign countries potentially making quarterly returns abroad.

Our company has decided to deal with this nonsense by introducing a minimum order value of 200USD wherever you happen to live in the world, then it becomes a standard export with no VAT implications for the seller, i.e. us.

If the packet is worth less than 270GBP then you affix a CN22 customs label, and if it's above that it's a CN23 sticker.

It seems simple.  Is there something I've missed?

 

[cseal]

As I understand it, the new import tax regime problem is EU-wide, including the ex-EU bit of the EU which is us.

...

So the EU has a 150EUR threshold per packet (the UK has it at 135GBP) above which the supplier does NOT have to collect the delivery country's VAT on the transaction which would imply registering for VAT in 27 foreign countries potentially making quarterly returns abroad.

Thanks Stuart.  Do you happen to know if the reversion to the previous rules for packages above ?135 / ?150 applies to both B2C sales and B2B sales?  Also to confirm it really is 'per packet' i.e. your business couldn't fulfil a >US$200 order by parcelling things up as 2 packages labelled '1 of 2' and '2 of 2'?

Our company has decided to deal with this nonsense by introducing a minimum order value of 200USD wherever you happen to live in the world, then it becomes a standard export with no VAT implications for the seller, i.e. us.

...

It seems simple.  Is there something I've missed?

Your solution seems simple enough - but of course it requires people to spend more per transaction.  The original issue I raised was that the new rules will have little effect on the big online sales companies (who have or will develop the resources / software etc to comply) and I guess smaller companies with higher value items but will a much bigger impact on smaller specialist companies e.g. various programmable LED drivers for modders.  Hardly a solution to help support the growth of new businesses and innovation.

In my case I had no intention of spending anywhere near US$200 but I was okay with paying import duty myself (or making sure I kept the value of goods+post below ?15).

Anyway the result is that some sellers have simply decided not to sell to UK customers.  And I guess from July 2021, some non-EU businesses may decide not to sell to the UK and the EU.

 

[ttxela2]

Well, we still haven't successfully shipped a parcel from the UK to Europe this year. Latest advice from Spain is that the receiver of each parcel must complete a form giving power of attorney to the courier.....

 

[Mr Mike]

It seems to be hit an miss with which country you send to. The 'game changer' (used loosely) I think is to use a courier that will do the customs declarations for you as part of their normal service. I use UPS and Fedex - as long you have the basics as I mentioned before they do the rest. But a lot of it is to do with customs on exiting UK and entering the country - lots of delays.

Have sent to:

Belgium - a right nightmare, sent 19/01/21, still not arrived, took UK customs 10 days to clear it, paperwork fine. UPS
France - pretty easy, should have taken 2 days, took 4, customer confimed no duty or any charges. UPS
Ireland - sent 27/01/21, should have taken 2 days, cleared UK customs on 31... in transit. UPS
Sweden - next day, took 2 days, customer confimed no duty or any charges. Fedex

I have some 1st shippments coming in from EU at the moment so will be interesting to see what pans out re charges to me - hopefully non.

 

[Mark Wright]

I had a commercial shipment from Denmark the other day. It only took 2 working days to arrive in Sheffield from making the order. I had an email from DHL on the morning of the delivery asking me to make the Vat payment online before they could deliver. The delivery charges were double what I usually pay for similar shipments.

I?ve just this minute had an email from Amazon telling me my new webcam coming to me from a Spanish supplier will no longer be delivered and have given me a refund. They didn?t say why there was a problem with the delivery so I can only assume the supplier can?t be bothered with the paperwork.

Mark
 

 

[RobinGriffiths]

An electronic supplier from Portugal (an ex-pat which I assume that his main market was the UK) who went dark back in January is now back delivering to the UK. They cited intergrating electronically with the Post Office, presumably for excise purposes. They are now delivering again, so they must have sorted their integrations out. Another electronic component company in Bulgaria which I regularly used for their silly cheap prices is still not exporting to the UK. I guess it wont be worth their while as the UK was probably a small part of their market.

PS. Don't mention the shellfish.

 

[nickwilliams]

(various problems listed)

I think UPS are having particular problems. I have a shipment (a piece of network gear which is faulty and so is going back to Prague where it came from) which was picked up by UPS on 12 January and is currently still stuck in Tamworth with no sign of movement. I used UPS because they delivered it to me in the first place, but it's beginning to look like that wasn't such a smart decision.

 

[ttxela2]

(various problems listed)

I think UPS are having particular problems. I have a shipment (a piece of network gear which is faulty and so is going back to Prague where it came from) which was picked up by UPS on 12 January and is currently still stuck in Tamworth with no sign of movement. I used UPS because they delivered it to me in the first place, but it's beginning to look like that wasn't such a smart decision.

UPS are who we use as we are tied to a European contract negotiated by our Distribution centre. Since our shipments are perishable on dry ice we use a premium service where the package is monitored every step of the way and topped up with dry ice if there are delays.

In practice at the moment all this really means is they tell us as soon as they lose it...... :-\