Exporting for Friend

Jobber200

Hello,

A friend abroad is buying expensive vintage items off auction sites like Ebay, but because many UK sellers don't ship abroad he has them shipped to me and I then courier to him.

The amount of money involved is in the 5 figures and I have to produce an Invoice for exporting out of the UK (outside EU). In this case I use the exact amount my friend paid the seller (he does this directly). He pays me back for minor things like packaging etc (this is at cost only, no profit) but not the items themselves.

Now it seems like it could be a regular favour, and I want to know if there's any tax implications for me if I keep helping out ? They're all shipped in my name and on paper it looks like I've sold lots of things but none of it belongs to me and of course the money for the goods doesn't pass through me. My friend is buying them for personal display (a collector), so there's no business aspect on his end either.

Any ideas ?

somethingcorporate

If you are producing invoices I would suggest this is not just "helping out a friend" even if it is and probably not how HMRC would view it either especially if there is a paper-trail leading back to you.

Probably best to register as self-employed and do an annual tax return even if you are just breaking even / making a loss to be on the safe side. Better to be safe than sorry

Jobber200

somethingcorporate wrote: »

If you are producing invoices I would suggest this is not just "helping out a friend" even if it is and probably not how HMRC would view it either especially if there is a paper-trail leading back to you.

Probably best to register as self-employed and do an annual tax return even if you are just breaking even / making a loss to be on the safe side. Better to be safe than sorry

I'm registered as self-employed and have a limited company (consulting), but not for this purpose. If I put these items on the books, how do I account for it in the inventory as I didn't purchase them from anywhere ? When they arrive at my place they are addressed to my friend, and the packing slip / invoice (from the seller) is also addressed to my friend.

My invoices when shipping are not for commercial reasons but are a Customs requirement for exports out of the UK valued at over £2,000 (according to the courier).

somethingcorporate

Tricky one - talk to your accountant that deals with your limited company?

He may advise you do not need to do something but getting the advice upfront is better than dealing with the penalties of getting it wrong.

tyllwyd

Could you maybe put in a copy of the invoice from the actual seller to your friend, rather than generating a new invoice yourself? Or maybe you should get involved in the payment chain - so that the seller invoices you, you pay the seller, and you invoice your friend who then reimburses you (but obviously that involves more trust between you and your friend).

BTW do you need to worry about VAT?

Jobber200

tyllwyd wrote: »

Could you maybe put in a copy of the invoice from the actual seller to your friend, rather than generating a new invoice yourself? Or maybe you should get involved in the payment chain - so that the money comes from you to the seller, and you invoice your friend who then reimburses you (but obviously that involves more trust between you and your friend).

When you ship airfreight there's an "airway bill", a document showing the consignor (shipper / sender / me), consignee (receiver, my friend). This has to match the invoice. When I sent off the first shipment, the courier asked me to sign the airwaybill and 3 copies of the invoice for clearing customs.

Hmm... I don't know about buying the items myself and asking him to reimburse. It seems like too much trouble / risk for no profit. It would push the accounts near VAT threshold and generate more paperwork then it's worth :embarasse

Thanks for all your thoughts though.

tyllwyd

I can't help wondering what's in it for you? What happens if the items are damaged while you are looking after them - would you be insured? What happens if you accept delivery of an item, then when your friend receives it they find it is fake? How much time are you spending arranging couriers etc? If you are producing what are essentially fake invoices, apart from any tax implications are you in danger of being accused of money laundering?

If this is more than a one-off favour, I personally wouldn't get involved.

Jobber200

tyllwyd wrote: »

I can't help wondering what's in it for you? What happens if the items are damaged while you are looking after them - would you be insured? What happens if you accept delivery of an item, then when your friend receives it they find it is fake? How much time are you spending arranging couriers etc? If this is more than a one-off favour, I personally wouldn't get involved.

Courier freight is insured. If it's fake he can take it up with the Ebay seller etc and file a dispute through them and / or Paypal I presume. What happens if my house burns down before the courier arrives ?... well let's not go there

It's a one-off because he helped me out before on something important.

doningtonphil

From my recollection of working for a major worldwide courier a few years back, a customs invoice does not necessarily correspond to the amount of money that has changed hands, indeed no money may have changed hands

A customs invoice is used primarily for the country the goods are being imported in to to ensure they collect the correct level of duty and tax. The invoice includes the senders details (consignor) the recipients details (consignee), the description of the goods (including customs commodity code for precise goods recognition) and most importanlty the value.

We used to have companies that sent items and stated that the value was £1.00 and then got upset when they tried to claim £300.00 from the courier for loss or damage and only £1.00 was offered

An invoice is required even for a non-commercial transactions. If I send my aunty gladys in the USA a gift and send it by courier I still have to produce an invoice and state the TRUE VALUE.

An invoice is basically designed to tell the inspecting customs officer what is in the box. It is NOT a declaration of a financial transaction between sender and receiver

The invoice is to declare the VALUE of the goods, not necessarily the amount paid for it. Of course, second hand items don't have s 'true value' as such so the smount your friend actually paid would be the value to state.

It may be that the goods are now 'personal belongings' which are often treated differently by different countries. I seem to remember Australia and the USA having specific 'personal belongings' forms which need to be completed

tyllwyd

Oh, I hadn't realised that a customs invoice was not the same as an ordinary invoice. I still think it could look quite odd though, if someone sees that you are regularly sending thousands of pounds worth of goods abroad, but that there is no money going through your books.

Jobber200

doningtonphil wrote: »

From my recollection of working for a major worldwide courier a customs invoice does not necessarily correspond to the amount of money that has changed hands, indeed no money may have changed hands

A customs invoice is used primarily for the country the goods are being imported in to to ensure they collect the correct level of duty and tax. The invoice includes the senders details (consignor) the recipients details (consignee), the description of the goods (including customs commodity code for precise goods recognition) and most importanlty the value.

We used to have companies that sent items and stated that the value was £1.00 and then got upset when they tried to claim £300.00 from the courier for loss or damage and only £1.00 was offered

An invoice is required even for a non-commercial transactions. If I send my aunty gladys in the USA a gift and send it by courier I still have to produce an invoice and state the TRUE VALUE.

An invoice is basically designed to tell the inspecting customs officer what is in the box

The invoice is to declare the VALUE of the goods, not necessarily the amount paid for it. Of course, second hand items

Thanks for that, puts my mind at ease