Sales Vat and Import Vat

donglefan

I'd value your thoughts about the following situation:
I wanted to buy an item from Italy listed at £116 (GBP) but alas the shipping is £19.50 bringing the total to £135.50.

I asked the company if they could perhaps charge me in euros, so that I could choose a day with a favourable exchange rate which would bring it in to £135 inclusive of shipping and sales vat.

They responded:
"If you order products with NET value are under £135,00, the import charges will be on our expense and you will not have to pay. 

We ship our products everyday to the United Kingdom and no one of our clients had "problem" with the delivery of the product."

I phoned HMRC customs who were equally adamant that if I pay a penny more than £135, import Vat and duty would be chargeable.

The Italian company's position actually makes more sense because if goods imported cost to the customer between £135 and £162, customers end up paying tax twice according to HMRC (once in sales vat and then again in import vat.)   Above £162, the seller takes off the sales vat, and customer pays vat and duty via the courier, which everyone seems clear about.  It's the £135-£162 zone that is perplexing.

DullGreyGuy

VAT is chargeable either way the difference is if its under £135 the merchant has to charge you UK VAT whereas if its over £135 they sell it without any VAT charged and you pay it, duty and clearing charges on importation. 

Are you sure they aren't quoting fully landed costs? Whilst under £135 they have to charge UK VAT, for parcels over £135 they are able to deliver it inclusive of taxes thus giving you certainty of price and typically the courier charge is less than if they clear it for you... some do charge a bit of a premium for this though to avoid FX issues (less of an issue if they are billing in GBP)

donglefan

Thank you DGG.  This is on their website under their Brexit section:
"For orders over or equal to £ 162,00 VAT included (£ 135.00 net of VAT), VAT amount will be refunded after placing the order. This is because upon delivery you will subsequently be requested to pay VAT and import duties, if any (as they are asked to the recipient)
If the amount is below £ 162,00 VAT included (£ 135.00 net of VAT) the VAT won’t be refunded and there will be no charge."

DullGreyGuy

So yes, if you get it to be below £135 they are going to add on the VAT and so if it were 1p below they'd charge you the £161.99. If it's over £135 their system is rubbish but they refund you the VAT they charge and instead you'll pay VAT, Duty and a courier fee on delivery.

You can't avoid the VAT but getting a small discount to get it below £135 net will avoid the duty (3% from value memory) and the circa £13 courier fee. Depends how often they do discount codes/free delivery promotions etc

donglefan

As I read it, if I pay £135.50 inclusive of vat and postage, I pay the company the vat and then when it comes through UK customs, I also pay the vat a second time.

Hoenir

donglefan said:

customers end up paying tax twice according to HMRC (once in sales vat and then again in import vat.)  

Import duty is a different tax to VAT.  Will be charged at a rate applicable to the product being imported. 

On imported goods. Vat is charged on the landed cost of - net goods cost plus shipping cost plus import duty. 

varyat

With reference to the above thread, a twist on the usual procedure for paying custom duty:

LNXP/CCL/GLS Scam       NFRC240706758903

Import duties

• February 2024:  Purchased Baroque sideboard console from LNXP (Germany) via Bay for £314.28 including postage and packing.
• Feb 29th console delivered - no problems. No fees demanded.
• March: Message from LNXP (via Ebay), asking for me to pay £65 for shipping and import fee with an invoice attached from the alleged handling company  CCL (Customs Clearance Ltd. Feltham, Middx).
• Replied to LNXP stating that I did not understand why I was being asked for import duty when the item in question had already been released and delivered.
• LNXP kept sending emails requesting payment.  I replied that I did not know what they were asking for as I had received the goods.
• April: Emails stopped
• June: Emails started again from LNXP (via Ebay), threatening legal action if I did not pay £65 via Paypal or Bank transfer.  I was asked for my email address directly which I refused to divulge and said that I would not be doing any transactions with them as I thought they were scamming me.
• Separately, I decided to contact CCL by telephone and was greeted with an answerphone message requesting my email address which I stupidly provided.
• Since then, CCL have been harassing me for £58.02 for import fees.  I again replied that I had received the goods and did not understand what the payment was for.  In exasperation I agreed to make payment. I was asked to pay via bank transfer.  I offered to pay via bank cheque or postal order to keep my bank details secure.  I was told that this was unacceptable under their company policy to which they asked for a cash transfer.
• I replied saying that I thought they were a scam.
• I attempted to contact their accounts dept (0208 231 0900 and 07753457927) and expecting a corporate greeting, I was greeted by a generic ‘hello’. When asked where I was calling, he said he was from CCL China office to which I decided to hang up.
• I reported all this to my bank and blocked all emails.
• Since then I have received mysterious pop ups on my mobile phone together with a load of emojis which then disappeared.
• Presently awaiting advice on how to proceed.

Ergates

As per the advice given on your other post:

This is not a scam.  You do owe this money.  You should pay it now before they take things further and you end up with a CCJ against you.