Big Warning - UK Gov has removed the £15 low value VAT exemption threshold on importing... 29 December 2020 at 1:07PM in Praise, vent & warnings 30 replies 2.3K views

BethRobinson

booneruk said:

When I see such a number of small orders coming all the way from China I can't help but think of air miles and carbon footprint

They don't come individually on their own plane.

Doubleshotdamo

I disagree. Anything being sold by an obsess seller is subject to the 20% vat, even if the item is located in the UK. 
I was watching an item on ebay watching an item for £28. I bagged it at only to find the checkout price was £33.60. The company is registered in China, ships from a UK warehouse and has kept the price the same, so basically a 20% increase from 31st December 2020 to 1st January 2021! 

soolin

Doubleshotdamo said:

I disagree. Anything being sold by an obsess seller is subject to the 20% vat, even if the item is located in the UK. 
I was watching an item on ebay watching an item for £28. I bagged it at only to find the checkout price was £33.60. The company is registered in China, ships from a UK warehouse and has kept the price the same, so basically a 20% increase from 31st December 2020 to 1st January 2021! 

You may need someone who can explain it better than me, but there is a scheme where items are stored in a sort of bonded warehouse on behalf of an overseas seller, and then attracts the correct VAT at the point it sells and leaves the warehouse. VAT is not charged on UK sold items other than in this sort of scenario. This has been happening for ages with warehouses mainly on the Continent where VAT and handling charges have been charged on goods sold by Far East sellers and sent from their Continental warehouses where import duties had not previously been paid. It is not new nor is it sneaky or underhand.

The other alternative is that the seller is misrepresenting their location, and that would not surprise me. In the past before I got used to spotting that type of seller, I did buy items I was convinced from the listing were in the UK but actually turned up from China.  Or it might even be that the seller’s location is the important factor on eBay and the system doesn’t differentiate between a Chinese seller in China and a Chinese seller resident in the UK - the fact they are registered in China trumps everything else and the system can’t spot the difference.

jaybeetoo

This was in The Times today:

The price of Chinese products sold on Amazon and eBay has jumped after tougher tax rules came into force on January 1.

Online marketplaces now have to account for the VAT paid on products sold on their platforms by third party sellers through deducting the tax at source. The change was made amid growing concern that thousands of mainly Chinese sellers were evading the tax by using fake VAT numbers and shell companies to sell products in effect tax-free.

Analysis of platforms such as eBay and Amazon suggests that the move has had an instant effect, with potentially tens of thousands of products rising in price significantly overnight. Many items are now about 20 per cent more expensive.

Campaigners want HM Revenue and Customs to investigate those sellers who have put up their prices, in an attempt to pursue them for previous VAT fraud.

PMatthews

Literally the same problem here - PCBs and components in small orders

So yeah, as far as I can tell, RM aren't going to be handling the VAT collection for this any more, and the PCB folks I use (JLCPCB) aren't VAT registered, so there's a good chance any order I make would get bounced or binned at customs (though I've not found definitive guidance that this is the case - anyone got links?). As far as I can tell, this means the only option is a courier service that deals with customs charges... JLCPCB do offer a DHL service along these lines, but it looks like it's £38 for a £30 order I want to place, which is a little prohibitive (considering RM shipping used to be ~£3.90). I wouldn't mind paying +20% on top of the PCB prices at all, but I can't justify more than doubling the order cost. I'd also need a handful of components from their sister co (LCSC), so I assume that would be another £40 to DHL for a £5 order.

(Just in case you're talking about the same people, I've raised a query on their support board, but no response as yet. I can't imagine they're going to be overly keen on registering with HMRC though)

stellalee

I'm in a similar situation with AliExpress. I order items under £15 which are then used in the manufacturing of goods I sell on. AliExpress often sends the goods to a European country, not UK, where some goods are collated and repackaged in a single envelope, before being forwarded to the UK. Post Brexit this system will incur customs clearance as though the goods came from the EU, subjecting the package to additional charges. I've tried contacting AE to see what they are doing to mitigate this but I've had no luck. I am presuming there will be price increases on all goods and I've noticed a couple of sellers taking minimum £orders, where there were none in place previously. Does anyone have any insight into this?

finalfantasist

stellalee said:

I'm in a similar situation with AliExpress. I order items under £15 which are then used in the manufacturing of goods I sell on. AliExpress often sends the goods to a European country, not UK, where some goods are collated and repackaged in a single envelope, before being forwarded to the UK. Post Brexit this system will incur customs clearance as though the goods came from the EU, subjecting the package to additional charges. I've tried contacting AE to see what they are doing to mitigate this but I've had no luck. I am presuming there will be price increases on all goods and I've noticed a couple of sellers taking minimum £orders, where there were none in place previously. Does anyone have any insight into this?

AliExpress is collecting VAT at checkout, so you shouldn't be subject to any additional charges.

jon81uk

stellalee said:

I'm in a similar situation with AliExpress. I order items under £15 which are then used in the manufacturing of goods I sell on. AliExpress often sends the goods to a European country, not UK, where some goods are collated and repackaged in a single envelope, before being forwarded to the UK. Post Brexit this system will incur customs clearance as though the goods came from the EU, subjecting the package to additional charges. I've tried contacting AE to see what they are doing to mitigate this but I've had no luck. I am presuming there will be price increases on all goods and I've noticed a couple of sellers taking minimum £orders, where there were none in place previously. Does anyone have any insight into this?

Doesn't matter if the goods stop in an EU country or not. This is not related to Brexit and the EU is also now charging VAT on imports under £15. Low value consignment relief is being ended no matter where the goods come from, the seller needs to send 20% VAT to HMRC on everything up to £135.
Over £135 then VAT and any relevant import taxes will need to be paid at point of entry.

stellalee

jon81uk said:

Doesn't matter if the goods stop in an EU country or not. This is not related to Brexit and the EU is also now charging VAT on imports under £15. Low value consignment relief is being ended no matter where the goods come from, the seller needs to send 20% VAT to HMRC on everything up to £135.
Over £135 then VAT and any relevant import taxes will need to be paid at point of entry.

Thanks - makes mostly more sense now. I had a closer look and I see that the point of the new ruling is to treat all imports to the UK the same way regardless of country of origin.  The legislation specifically refers to this legislation coming into action post-transition - are you saying that timing is purely coincidental?

jon81uk

stellalee said:

jon81uk said:

Doesn't matter if the goods stop in an EU country or not. This is not related to Brexit and the EU is also now charging VAT on imports under £15. Low value consignment relief is being ended no matter where the goods come from, the seller needs to send 20% VAT to HMRC on everything up to £135.
Over £135 then VAT and any relevant import taxes will need to be paid at point of entry.

Thanks - makes mostly more sense now. I had a closer look and I see that the point of the new ruling is to treat all imports to the UK the same way regardless of country of origin.  The legislation specifically refers to this legislation coming into action post-transition - are you saying that timing is purely coincidental?

I don't know the exact details on why the UK chose to change it at the same time as ending the Brexit transition period.
But the EU is ending low value consignment relief in the summer. Importing into the EU? Here's what you need to know about VAT — SimplyVAT.com

The changes on imports from non-EU countries would have come about if we were still in the EU too. But UK government decided to make the change at the same time as leaving the EU.

But small items coming in direct from China free of VAT is exactly why the EU wanted to make these changes, so that goods within the EU aren't at a disadvantage.