Hmv !!!

Wig

I just realised last night how stupid HMV were.

I saw a dvd which was usually minimum £27 on sale with HMV before xmas @ £20 great I thought I'll get it. After xmas they reduced it to £15 how annoyed I was!

I noticed they also now had part 2 reduced to £18 (the tax free threshold) I wanted it but I wasn't quick enough they sold out.

But this got me thinking...I realised that tax free £18 means HMV get 18 pounds of the sale (less postage).

But at £20 HMV retains only £17.02 !!!! - Taxable and HMV is a retailer which pays the VAT on taxable orders for you i.e. it is included in the price & yes the envelope says VAT prepaid.

So to recap:

Price £17.99 HMV gets £17.99
Price £19.99 HMV gets £17.02

If they had used their brains they could have saved me £2 and gained an extra £1 for themselves :mad: :mad: :mad:

If you take the logic further it is stupid for them to price any product from
£18 to £21.15, it would be cheaper for the customer and more profitable for them if they just charged £17.99!

maz168_2

Hi Wig,

Just wondering, what do you mean by tax free? If they sell something for under £18 they don't pay tax? Sorry, am just curious.

Thanks,

wokkies

hmm hmv dont mention them ordered a dvd for son beginning of december and it arrived today, had to tell him the postman was delivering it as santa forgot as ds is only 2

olly300

maz168 wrote:

Hi Wig,

Just wondering, what do you mean by tax free? If they sell something for under £18 they don't pay tax? Sorry, am just curious.

Thanks,

Sounds like big companies using tax loopholes so it may be a HMV in Jersey as items worth under £18 sent from aboard (outside EU) don't get VAT or customs duties added on to them.

Online stores that have offices in Jersey have to be a different store to the company on the mainland UK. A few months ago, Jersey made it clear that stores operating there had to be properly registered and not simply be a Jersey subsidary of a UK mainland online store to avoid paying UK tax. Jersey tax is lower.

So some online stores are completely registered in Jersey, while others have both a UK and a Jersey company i.e. Amazon UK and Amazon Jersey, Tesco UK and Tesco Jersey. An item sent from say Amazon Jersey has to be sent back to Amazon Jersey and not to Amazon UK as they are completely different entities legally so tax, stock holding, accounting are all separate.

Therefore:
Price £17.99 HMV gets £17.99 HMV Jersey- tax goes to Jersey
Price £19.99 HMV gets £17.02 HMV UK - tax goes to UK

Wig

olly300 wrote:

Therefore:
Price £17.99 HMV gets £17.99 HMV Jersey- tax goes to Jersey
Price £19.99 HMV gets £17.02 HMV UK - tax goes to UK

Yes you are right it was an online transaction but I think they are based in Guernsey not Jersey. But I quoted you above, "HMV Jersey - tax goes to Jersey" No because there is no VAT in Jersey (or Guernsey) and even if there was/is it is an exported goods sale therefore no tax.

"HMV UK - tax goes to UK" Yes if sold in the UK by HMV UK,
And yes if sold by HMV Jersey and imported to UK then customs take the tax as an import. But the error in your quote was that the item is not being sold by HMV UK, it is being sold by HMV Jersey. And if they had priced it @ 17.99 they would have made more money out of the deal, and I would have saved 2 pounds.

However I'm not so sure they are a seperate company because the law you quoted AFAIK only applies to Jersey, not Guernsey. So maybe there is no HMV UK and HMV Guernsey. but this is really a different issue anyway.

Wig

maz168 wrote:

Hi Wig,

Just wondering, what do you mean by tax free? If they sell something for under £18 they don't pay tax? Sorry, am just curious.

Thanks,

Hello,

A lot of the online shops are based in the Channel Islands which are a tax haven and are outside the European Union, but connected with the UK through UK legislation.

When we buy from overseas (includes all countries outside the UK which are also outside the EEC) we are importing the goods into the UK, as private importers for ourselves we do not have to pay import VAT on any item of a value under £18. If the items are valued over £18 they are taxable by HM Customs and Excise and some products will have extra import duties attached aswell as VAT.

There is an exception, where a friend of yours who lives overseas sends you a gift, you don't have to pay import taxes on the gift if it is valued below £30 (I may have this figure incorrect).