I was recently sent a parcel from the USA of goods (bronze statue) I had bought on eBay. The customs forms were correctly filled out by the seller.
The HM revenue and customs have changed VAT on the value of the goods, but also on the postage cost.
Does anyone know what the justification for this is? Presumably it is not a mistake, but it does seem unreasonable.
Robert
It follows the general principle. If you buy something in the UK which includes postage or delivery, the postage or delivery element is VATable at the same rate as the consignment.
I think that's fairly normal. The charges are based on the CIF (Cost, Insurance & Freight) value of the package when it arrives.
The argument they use is that although the goods may have been worth their declared value at the point of origin, transporting them to another location has enhanced their value. Its that enhanced value that they base their calculations on. Its annoying, I know, but there is some sense in their logic.
Chris
It also avoids unfairly overcharging customers who use a vendor that supplies on an "all in" basis with shipping included in the price, as against those who bill for it separately. And it avoids scams whereby shipping costs are artificially inflated so as to reduce the tax liability on the lower headline value of the actual item.
Mark
Basically they take the (almost justifyable) view that cost of shipping is part of the cost of the product.
However, what's more, if import tax/duty is due they charge VAT on the import duty as well.
IE even the tax itself is taxed again, this is definitely regarded as "Umpty" hereabouts. :(
Derek
This is interesting. I can see the logic in some ways.
thank you for your help folks,
Robert
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