New import VAT rules

joshnator1

Hi all,

I have a question about the new import VAT rules. As of the 30th March a overseas retailer has to collect the VAT from the point of sale if the item value is £135 or below. What happens if the retailer does not collect the VAT? As I have heard from a few friends that they have had packages returned to the sender because they didn't pay the VAT, I would assume this is the case of "it's a new system and we don't know what to do" by Border Force. I purchased the goods before the new import VAT came into effect so I know they don't have UK VAT added to the price. I contact HMRC and they told me they couldn't help with this issue.
Source link: https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

Any advice would be great.

Thanks  

powerful_Rogue

joshnator1 said:

Hi all,

I have a question about the new import VAT rules. As of the 30th March a overseas retailer has to collect the VAT from the point of sale if the item value is £135 or below. What happens if the retailer does not collect the VAT? As I have heard from a few friends that they have had packages returned to the sender because they didn't pay the VAT, I would assume this is the case of "it's a new system and we don't know what to do" by Border Force. I purchased the goods before the new import VAT came into effect so I know they don't have UK VAT added to the price. I contact HMRC and they told me they couldn't help with this issue.
Source link: https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

Any advice would be great.

Thanks  

The courier collects the VAT from the importer and passes it to HMRC.

F1shyFingers

The "new rules" came into effect on the first of January 2021 so I'm surprised you paid for goods 17 months ago and only got them delivered recently.  You're obviously more patient than me.

As to your question our government would like everyone in the rest of the world to collect tax (below the £135 threshold) on their behalf, but these are companies in sovereign countries that can do as they wish.  We have no ability to punish people abroad for not following our rules. Many companies have followed the rules in the EU and large marketplaces like eBay and AliExpress have done so too but outside of that, yeah not likely.

Incidentally the EU also implemented the same scheme in July of 2021 so we're not alone in our madness.

Ultimately if the sender did not pay tax on your behalf it falls on you as the importer to pay it.  If you fail to do so you'll be chased by debt collectors if the item was delivered or face the item being destroyed (and you being out of pocket) if you don't.

joshnator1

powerful_Rogue said:

joshnator1 said:

Hi all,

I have a question about the new import VAT rules. As of the 30th March a overseas retailer has to collect the VAT from the point of sale if the item value is £135 or below. What happens if the retailer does not collect the VAT? As I have heard from a few friends that they have had packages returned to the sender because they didn't pay the VAT, I would assume this is the case of "it's a new system and we don't know what to do" by Border Force. I purchased the goods before the new import VAT came into effect so I know they don't have UK VAT added to the price. I contact HMRC and they told me they couldn't help with this issue.
Source link: https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

Any advice would be great.

Thanks  

The courier collects the VAT from the importer and passes it to HMRC.

Is that the same as before, when you pay Royal Mail/Parcel Force a handling fee plus VAT?

joshnator1

F1shyFingers said:

The "new rules" came into effect on the first of January 2021 so I'm surprised you paid for goods 17 months ago and only got them delivered recently.  You're obviously more patient than me.

As to your question our government would like everyone in the rest of the world to collect tax (below the £135 threshold) on their behalf, but these are companies in sovereign countries that can do as they wish.  We have no ability to punish people abroad for not following our rules. Many companies have followed the rules in the EU and large marketplaces like eBay and AliExpress have done so too but outside of that, yeah not likely.

Incidentally the EU also implemented the same scheme in July of 2021 so we're not alone in our madness.

Ultimately if the sender did not pay tax on your behalf it falls on you as the importer to pay it.  If you fail to do so you'll be chased by debt collectors if the item was delivered or face the item being destroyed (and you being out of pocket) if you don't.

I didn't know that that they came to effect in January 2021, I haven't paid any import VAT on anything lower than £135 until 30th March 2022 and on the gov.co.uk website they have 2 different documents stating 2 different things.
one states that the retailer has to collect the VAT and other states that you don't pay anything if the package is under £135. 

sheramber

Which is the same - you don't need to pay the courier because the seller has included it in the price.

If the sender does not pay it, then you , as importer, have to pay it.  T

Sandtree

powerful_Rogue said:

joshnator1 said:

Hi all,

I have a question about the new import VAT rules. As of the 30th March a overseas retailer has to collect the VAT from the point of sale if the item value is £135 or below. What happens if the retailer does not collect the VAT? As I have heard from a few friends that they have had packages returned to the sender because they didn't pay the VAT, I would assume this is the case of "it's a new system and we don't know what to do" by Border Force. I purchased the goods before the new import VAT came into effect so I know they don't have UK VAT added to the price. I contact HMRC and they told me they couldn't help with this issue.
Source link: https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

Any advice would be great.

Thanks  

The courier collects the VAT from the importer and passes it to HMRC.

that cannot be right @powerful_Rogue as anything bought from a market place like Amazon or eBay then its the market place and not the vendor's responsibility... if I sell my goods via both marketplaces and via my own site the courier will have no way of knowing which it should and shouldn't be asking the vendor for taxes for, the sender could just say they were all sold via eBay.

To the best of my knowledge the vendor has to deal with HMRC and there will inevitably be leakage caused by those not knowing or ignoring the requirement however this will be offset by the fact that large sellers will broadly be compliant and the minimum value for VAT has been removed so smaller sales from those that do pay will offset the larger purchases from those that dont. 

powerful_Rogue

Sandtree said:

powerful_Rogue said:

joshnator1 said:

Hi all,

I have a question about the new import VAT rules. As of the 30th March a overseas retailer has to collect the VAT from the point of sale if the item value is £135 or below. What happens if the retailer does not collect the VAT? As I have heard from a few friends that they have had packages returned to the sender because they didn't pay the VAT, I would assume this is the case of "it's a new system and we don't know what to do" by Border Force. I purchased the goods before the new import VAT came into effect so I know they don't have UK VAT added to the price. I contact HMRC and they told me they couldn't help with this issue.
Source link: https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

Any advice would be great.

Thanks  

The courier collects the VAT from the importer and passes it to HMRC.

that cannot be right @powerful_Rogue as anything bought from a market place like Amazon or eBay then its the market place and not the vendor's responsibility... if I sell my goods via both marketplaces and via my own site the courier will have no way of knowing which it should and shouldn't be asking the vendor for taxes for, the sender could just say they were all sold via eBay.

To the best of my knowledge the vendor has to deal with HMRC and there will inevitably be leakage caused by those not knowing or ignoring the requirement however this will be offset by the fact that large sellers will broadly be compliant and the minimum value for VAT has been removed so smaller sales from those that do pay will offset the larger purchases from those that dont. 

It's all done via the airway bill/consignment number along with the customs declaration.

Sandtree

powerful_Rogue said:

Sandtree said:

powerful_Rogue said:

joshnator1 said:

Hi all,

I have a question about the new import VAT rules. As of the 30th March a overseas retailer has to collect the VAT from the point of sale if the item value is £135 or below. What happens if the retailer does not collect the VAT? As I have heard from a few friends that they have had packages returned to the sender because they didn't pay the VAT, I would assume this is the case of "it's a new system and we don't know what to do" by Border Force. I purchased the goods before the new import VAT came into effect so I know they don't have UK VAT added to the price. I contact HMRC and they told me they couldn't help with this issue.
Source link: https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

Any advice would be great.

Thanks  

The courier collects the VAT from the importer and passes it to HMRC.

that cannot be right @powerful_Rogue as anything bought from a market place like Amazon or eBay then its the market place and not the vendor's responsibility... if I sell my goods via both marketplaces and via my own site the courier will have no way of knowing which it should and shouldn't be asking the vendor for taxes for, the sender could just say they were all sold via eBay.

To the best of my knowledge the vendor has to deal with HMRC and there will inevitably be leakage caused by those not knowing or ignoring the requirement however this will be offset by the fact that large sellers will broadly be compliant and the minimum value for VAT has been removed so smaller sales from those that do pay will offset the larger purchases from those that dont. 

It's all done via the airway bill/consignment number along with the customs declaration.

Would love to think it is but looking at the latest customs declaration on a parcel received from overseas there is nothing on there to indicate that the sender, Amazon or I are the ones to be billed. I'd also be highly surprised if every postal service in the world have come to an agreement that if the vendor tells PHLPost that this item was sold via Amazon.de that they are to bill Amazon Germany for the taxes (as was my case).

Its a nice idea but cannot see it working on a global scale and strongly suspect that HMRCs own comments that there will be leakage caused by overseas senders not paying what's due but it'll be offset by the taxes collected on the sub £20 orders from compliant companies/market places which were previously exempt.