Warning to Ebay buyers re import charges

From the US I've paid -

Duty 3% VAT 17.5%

FedEx charged a £5 admin fee.

However I had no choice from the supplier but to use FedEx's quickest and most expensive service which cost £35. This is another common problem; suppliers are getting commission when they force their customers to use certain expensive delivery services.

The UK duty rates are available here -

Daytona

AIUI you can legitimately get a bargain in this way in the case of goods below a certain value. According to Parcel Force "Goods with a value exceeding £18 (for commercial items including internet/mail order purchases), or £36 in the case of gifts between private individuals, are generally subject to Customs charges." For some items it can also be worth looking at what is on offer elsewhere in the EU.

I had this happen to me a couple of times with stuff sent from the states, until one day they delivered something and asked me to pay the fees, but I had no money on me at the time so said I couldn't pay. The delivery driver just left me the parcel anyway and I've never paid for anything since.

Yesterday I received a wifi access point ordered via eBay from the US, value $120 - I was expecting to pay VAT, duty and handling charge but the sender lied about the contents and value on the declaration slip so I paid nothing!

You have to pay government duty and taxes lawfully charged but you have no contract with the courier. I would suggest that, legally, the person who instructs the courier should pay his fee.

I once bought an item on Ebay from the US for something like $10 but the silly seller put the value down on the declaration as $50 so I got clobbered for duty, VAT and a handling fee by Royal Mail. I wrote to HMCE and sent them the Ebay invoice and they sent me a refund but RM dug their heels in and refused to even answer my letters.

I notice that fairly recently, companies from the US selling downloadable goods like software and music include VAT in their bill. Is this a scam since I cannot see a US based company having a UK VAT account? If you are VAT registered and quote a UK VAT number when you make the credit card payment, no VAT is charged so how is the VAT accounted for?

Alasdair.

Agreed. I endured many arguments on this topic in the 1980s. If the courier insists on levying such fees, they should include them in the amount they charge to their customer (usually the sender). The principal argument I heard *against* this point of view (after the laughable "it's an industry standard") is that many large companies have special arrangements with customs which result in the delivery person not having to collect the duty and VAT. And it's too much trouble for the couriers to charge their customers varying amounts depending on whether or not such arrangements are in place. I remain unconvinced. What happens in practice is that if the couriers make the recipient pay, it makes their prices look better, so of course they're going to do it.

I used to insist that my American suppliers did *not* use UPS because of this problem. On one occasion goods - quite heavy goods - were returned to the USA at the sender's expense because they took no notice of my instructions. It only happened once. :-)

Not a scam. If they are importing to the EU thay have to charge VAT at the rate applicable at the point of delivery, presumably there's a mechanism for handing it over, in our case, to the UK treasury.

How do you work this out? VAT only requires to be charged in cases of x thousands of pounds being charged each year (fill in x with whatever the current amount is). US firms have no requirement to charge VAT... unless they have an EU presence... so that might be the case here.

Actually it is a somewhat strange system... VAT for books is zero rated in the UK so I have been able to order books from all over the world without any extra payments... however ordering books from Amazon.co.uk for delivery in the Netherlands and Spain has resulted in VAT being applied.

Axel

Why would Royal Mail give you a refund, they charged you for collecting the fee off you and passing it on to the HMCE. The fact you later got a refund of HMCE is nothing to do with them, they did the job they charged you for.

Its HMCE you should have been harrasing for a refund of your Royal Mail fee's

I don't (work it out). It is new(ish) EU rules dealing with imports. It works the other way as well. Royal Mail, that I know of, is registered for VAT with allEU countries so that when it sells postage stamps to collectors it charges VAT at the appropriate local rate.

I still don't see how the EU can impose or enforce tax rules on American companies doing business within the US. Most US companies are probably totally unaware of such rules, or might just chose to ignore them anyway. Its hard enough for businesses to keep track of the various regulations they have to comply with in their own country, and virtually impossible for them to know about tax rules in every other country in the world.

Chris

There does appear to be the potential for fraud here, and I know of one UK company that does the reverse and scams UK taxpayers. It's a "property investment company" that basically deals as a real estate agent for Bulgarian properties but is based in the UK. VAT law states that commission on Real Estate transactions there have to be charged at the Bulgarian rate of VAT (20%) which this company does, but they're not registered for VAT with either the UK or Bulgarian authorities.

They only refunded the VAT they charged me when I kicked up a stink and asked repeatedly for a Tax Invoice, when they admitted they couldn't supply one as they hadn't gotten around to registering.

"Chris Blunt" wrote

They don't. They "impose or enforce tax rules on American companies doing business within the *UK* (not US)".

If a company in US wants to sell into the UK, then they should jolly well research UK law & taxes!!

snip.

None of this is news. It has been happening for years.I know 10+ years ago I ordered some bits for my Mac from the US, and got hit with a large tax bill when it arrived. Sometimes articles get through without being charged, and it has been like that for a long time. Think of it as a bonus when you receive an import with no duties/tax to pay. Alan.

If an American company has its offices in the US, with no physical presence in the UK, then their place of business cannot be considered anywhere other than the US. The fact that a UK resident happens to order goods from them to be sent by mail doesn't alter that in any way. Why should such a company be subject to laws passed by the EU, which can't be enforced anyway?

Chris

"Chris Blunt" wrote

Isn't it because the "place of supply" is deemed to be in the UK, because that's where the customer was when s/he made the order?

"Chris Blunt" wrote

Now that's another debate!

I don't think it matters whether you can see it or not.

The fact is that they have and no-one has challenged the legality of the rules.

I accept that enforcment is difficult but that's another matter.

Ignorance is no defence. AIH the main players do know the rules are there.

That's a cost of choosing to do business in another country. You have two choices. Don't do business in that country or suffer the overhead of learning (and following) the rules. personally I don't see that having a physical presence in a country should change this and neither does the EU.

tim

Why then was I charged VAT for ordering a software download using my credit card from A US company when I was sat at a computer and physically located on US soil. I just happened to use my UK credit card for the purchase.

I declined to go through with the order and went to a local store and purchased the software free of any sales tax.

Something isn't quite right with this.

:) Chris.