Import VAT and Amazon/Kickstarter fees

bzd

Hi all,

I'm in dispute with UK Border Force over import VAT on a physical item that was "bought" by backing a Kickstarter campaign. The item was "bought" for $90 but with the Amazon payment fee and the Kickstarter fee that bumps the price up a bit to $130. In reality I backed a Kickstarter campaign and the item was the "reward".

I understand this more-or-less counts as a sale, but I think the import VAT should only apply to the value of the goods. The fees should be exempt *if* they are buying commissions.

So what I really want to know is are the Amazon payment fee and Kickstarter fee (which appear separately from the goods value on the invoice that was attached to the outside of the parcel) "buying commissions" or "selling commissions"?

i.e. are the commissions charged by Amazon and Kickstarter on the buyer's or seller's behalf? I would say the buyer's behalf because they are commissions charged from me when I instruct them to take my money and then go on to pay the "seller" (the amount I pay minus the fees).

Any thoughts or better still does anyone know outright (I have searched a lot for this but can't find anything definitive about these particular fees)?

Thanks,

Ben

visidigi

So did you pay $90 or $130 for the item?

You backed a campaign for an item to be produced. The item was produced and shipped to you. You have to pay duties and taxes on the value of the goods as they exceed the £15 allowances that you have for a non-dutiable shipment in a dutiable category.

Its the same with the shipping costs, the shipping forms part of the value of the goods when levied for duties and taxes as this was required to get the goods to you (no shipping no delivery) - so therefore, no Payment/Kickstarter Fee no product...

I believe you would owe based on the total specified on the invoice - and as a result fees included.

bzd

Hi,

Paid for the item? I'm not sure I paid at all -- I backed a Kickstarter campaign!

I realise the item and the amount I paid for /it/ and the shipping are subject to import VAT, along with what they call the "assists" which is commissions, licence fees and royalties.
HMRC Reference:Notice 252 3.2

However, the HMRC rules say that "buying commissions" are exempt from import VAT (HMRC Reference:Notice 252 3.15(b)), hence I want to know specifically if the Amazon payment fee and the Kickstarter fee can be classed as buying commissions.

The invoice total ought to be irrelevant -- if I buy two items and one goes to the US and the other to the UK there's no way I should pay VAT on the invoice total. Here the invoice contains the shipping cost and the goods price (both definitely subject to import VAT) which is also the value in the value of goods certificate, and also the Kickstarter fee and Amazon payment fee, which were commissions on the service I asked them to perform (pay the Kickstarter campaign), and therefore (I think) are buying commissions and not subject to import VAT.

Ben

Hintza

So you are arguing over £4.88?

In situations like these you should probably leave it to your accountant.

bzd

Ha ha, yes indeed it is for a small amount. However, if the amount they charged is wrong then I can also claim back the extortionate £8 handling fee imposed by Royal Mail which is not insignificant.

Ben

visidigi

bzd wrote: »

Hi,

Paid for the item? I'm not sure I paid at all -- I backed a Kickstarter campaign!

I realise the item and the amount I paid for /it/ and the shipping are subject to import VAT, along with what they call the "assists" which is commissions, licence fees and royalties.
HMRC Reference:Notice 252 3.2

However, the HMRC rules say that "buying commissions" are exempt from import VAT (HMRC Reference:Notice 252 3.15(b)), hence I want to know specifically if the Amazon payment fee and the Kickstarter fee can be classed as buying commissions.

The invoice total ought to be irrelevant -- if I buy two items and one goes to the US and the other to the UK there's no way I should pay VAT on the invoice total. Here the invoice contains the shipping cost and the goods price (both definitely subject to import VAT) which is also the value in the value of goods certificate, and also the Kickstarter fee and Amazon payment fee, which were commissions on the service I asked them to perform (pay the Kickstarter campaign), and therefore (I think) are buying commissions and not subject to import VAT.

Ben

The invoice total is imperatively important. It has to itemise whats in the box at the point of clearance. If the invoice said one went to the US and on to the UK it wouldn't clear. At all.

Commissions taxes, I understand as being exempt are auction commissions for example where you agree to buy an item for X and a percentage is added to the item for the auction house. Different fees to those you have been levied.

For £4.88 you will pay more in trying to get it back, the £8 Royal Mail fee wouldn't be refunded, they have performed the duty of prepayment of duties and taxes, even if you were due a refund, it would only be for the amount you overpaid, not the processing fee.

bzd

Royal Mail told me they'd refund the full £8 if they had acted on an incorrect VAT payment, but I have to say I'm doubtful!

Thanks for giving an example -- real life scenarios seem to be lacking from anywhere that mentions buying and selling commissions. I don't quite see the difference between the example you give and the case here. I pay an agreed amount for an item, and pay commission to two agents (one for arranging the payment another for enacting it). Why is that different to the commission at an auction house? (Also, I thought the commission from an auction house came out of the agreed amount, not extra to it, so it would be a selling commission).

Cheers,

Ben

visidigi

Royal Mail will only refund you if the mistake is theirs. This isn't their mistake, its customs if there is one - so the max you would get back is £4.88.

Auction houses tend to add in the US, not part of the selling price like here.

The payment fee and kickstarter isn't commision, they are transaction fees levied to perform the transaction - you wouldn't have been able to complete the transaction without paying them.

It has to be said, you might have a case for a refund as the situation isn't crystal clear, but Customs really aren't worth messing with unless its worth three digits - there are plenty of cases you get away with no charges if you frequently import, its just sometimes you get stung - the reassessment fee that HMRC can levy is much higher than you are claiming you have been overcharged.

bod1467

visidigi wrote: »

but Customs really aren't worth messing with unless its worth three digits

But it IS 3 digits ... £4.88.

Buzby

Border Force? :rotfl:

If they were involved, you've got it for free!

custardy

bzd wrote: »

Ha ha, yes indeed it is for a small amount. However, if the amount they charged is wrong then I can also claim back the extortionate £8 handling fee imposed by Royal Mail which is not insignificant.

Ben

Can you? You are paying VAT either way.
So how do you see not paying a clearance fee?
Given your care for the fine detail,why didnt you do your own for free?