Chargeback on Overseas Purchase - VAT Claimable ?

skyehog

Hi Folks

My 1st Post ....

I recently purchased a piece of jewellery making equipment from an online store in New York. All seemed well until the item arrived fatally damaged in transit & I tried to contact the seller who had gone to ground and now seems to have gone out of business altogether apart from an ongoing EBay presence.

I have contacted my bank who issued the Mastercard the item was purchased on (roughly £300 excluding VAT). I told them I wished to claim under Section 75 etc, etc but they are adamant that they will proces this as a 'Chargeback' instead. I'm really not bothered how they do it as long as I get my money back & WILL push them on Section 75 if needs be. I am in the process of compiling evidence for them as they have requested.

My question relates to Chargeback (& Section 75 for that matter) claims on overseas purchases and specifically whether the VAT which was payable on this is claimable as part of the same claim ?

The VAT was paid as a separate payment on the same card and was paid to HMRC via Parcelforce who act as the collection agent, charge a small fee for it and won't deliver the item until the VAT was paid.

I understand that VAT on returned items purchased overseas is re-claimable back direct from HMRC. However in this case the item was broken and it is the card issuer I am going after for a refund.

I am anticipating a squabble with the bank / Mastercard over the refund for the damaged item as it is & I can just imagine they will say, 'Sorry the VAT's not our problem, speak to HMRC'. However, if the item had been purchased in the UK the VAT would have been included already & I wouldn't expect Chargeback of the VAT to be an issue. Surely I would be entitled to claim back the full, VAT inclusive sum, despite the VAT having been paid afterwards to the Inland Revenue & not the vendor - or not...?

As far as I know, 'associated costs' are claimable back under Section 75 & I imagine could include such things as import tax &/or VAT. I'm not sure if the card issuers' Chargeback system works in the same way ?

I wonder if anyone else has had any experience of this ? I imagine it must have affected anyone claiming on Chargeback or Section 75 for overseas purchases of items on which VAT was collected by UK customs (which is most non-gift items over about £18 I think).

Any advice would be gratefully received so I am forearmed for my conversations with the card people.

In the mean-time, I would strongly advise against purchasing anything from ToolforJewels / A&M Jewel Tool Co. in New York !!!

Thanks a lot

Cheers

Nick

bengal-stripe

Get in touch with HM Customs and Excise. There are rules in place about the refund of duties and VAT
if the deal gets cancelled and the goods need to be returned.

http://search2.hmrc.gov.uk/kbroker/hmrc/contactus/search.ladv?sr=0&as=1&cs=ISO-8859-1&sc=hmrc&sf=&sm=0&nh=50&ha=34&tx0=21&fl0=contactid:&tx1=&raction=view

If I remeber correctly, you have to prove the goods have been sent back.

chattychappy

It is some years since I got involved in this. But there used to be a number of procedures. One was where VAT was correctly levied, but the goods weren't to contract. In this case you could reclaim the VAT on proof of export. Another was where you export with the intention of re-import (eg following repair/modification). In this case, you can't reclaim, but you get a certificate to prevent VAT being applied again on re-import. And there was another procedure where the goods were faulty/not to contract etc., where consequently VAT is wrongly applied. Eg you're sent an empty box or the goods are totally duff. Here you could reclaim the VAT without proof of export.

Anyway, as to the OP disputing this as an associated charge with the CC. I'm just guessing this is a non-starter. The deal was done in the US. Sure it went wrong. But Parcelforce paid the VAT and the CC was separately used to reimburse Parcelforce. I can't see that this was ever part of the original contract. Just as if you hand carried it yourself and paid the VAT yourself at the airport.

ironlady2022

Was it for business use? Thought section 75 did not cover business purchases?

skyehog

Thanks for the replies folks.

The unit is for hobby, not business use.

chattychappy: It sounds to me like the third option is the one I need to be looking at. The unit is the right one but smashed, and I can't return it because the vendor has disappeared off the face of the earth.

If I can claim back the vat from HMRC on that basis it would be my preferred option. Otherwise, I am still looking into getting spare parts from the manufacturer (not original vendor) in an effort to repair it (not sure if this will be possible).

I guess it may be possible to have the VAT on the spares waived in this case (assuming I can't claim back on the whole thing).

Anyhow, I'm wandering off topic a bit now....

Thanks again - I'm off to contact HMRC

Cheers

Nick

chattychappy

Good luck. Bear in mind there might be duty too - and similar rules apply to reclaiming duty wrongly applied, or waivers etc.

I hope there isn't too much hassle involved - there was when I used to do this many years ago.