Brexit & Shipping to the EU

[LSP_Mike]

How's the rant going Bob?

As always, practical solutions welcome.

[Chek]

Logistics are becoming more complicated than was the case.

From 12 mile lorry queues on both sides of the channel, to trucking companies being completely unprepared for new customs requirements.

There is also an issue with European lorry drivers not being willing to risk the dead time that waiting for clearances introduces when their business needs to be moving as fast as possible from pick up to their destinations. The near universal just-in-time delivery model, just will not work for brexit UK.

[Radub]

The Irish Government has issued "warnings" that all items above 20 euro in value coming from the UK will be charged VAT (21% in Ireland, down from 23% due to COVID) and customs fees. Usually a "processing fee" is added to all this. This is the procedure for all items coming from outside the EU, it is not something new applied against the UK as some kind of "punishment".

So, I fail to see why UK-based retailers hail "removal of VAT" as some kind of "advantage".

The "reverse" of this is going to happen to UK-based customers who will face charges on anything arriving from the EU. 

The outcome of this is that I will find it too expensive to purchase anything from the UK and instead I will be purchasing from other EU-based retailers. I have plenty of choice (which cannot be said for UK-based customers.)

I don't want to make this "political" but this cannot be good for customers and commerce in the UK. 

Radu

[Greif8]

I rarely order models or supplies from the UK, but I do order from Wing Leader fairly frequently.  Looks like that is coming to an end which is too bad for me and Wing Leader. 

 

Ernest 

Edited December 17, 2020 by Greif8
Word Selection

[thierry laurent]

Same here than in Ireland.

 

One example: 30£ of Aftermarket sets from the big H plus the P&P resulted in something around 45£ or around... 50€.

 

Now this will probably be: 30£-20% of UK VAT = 24£ + P&P= 39£. So we will get 45€ + 21% of national VAT + A miminum of 14€ of customs fee= ... 68€! 

 

Ouch! A 34% increase of the global cost! Practically it is reaching twice the price of the item. This is the result of the scenario falling on the WTO rules.

 

And in my country, the customs fee increases per step (next one at 22€) according to the value of the parcel. Useless to say this will be painful for customers and finally for resellers. This will be very similar in the EU to UK direction.

 

We were very lucky in Europe to have the critical mass of that internal market for modellers. We will now understand better the situation of some developed countries that have close to zero model or aftermarket industry. South Africa is a case in mind. For them, close to everything must be imported and accordingly the hobby is 25 to 30% more expensive than in the countries relying on an internal market.

 

I also think this situation had an impact in the US. Our American friends are lucky enough to have far less taxes on import and globally lower kit prices for most Asian kits for decades. However, with regard to LSP kits, they are not that lucky as a huge quantity of items are coming for the old world. Their lack of "internal" model industry is a source of cost and this is a problem in a "niche" market. Alas, the critical mass of LSP modellers is spread between different "internal" markets.

 

Well, at least, this means we are quite good contributors to the global health of our states because of the amount of taxes we are paying for our hobby...

 

 

[Sepp]

8 hours ago, Bob MDC said:

The only "B" word I would be Bollocks.

I don't know about the amount of spurious brown stuff that is circulating but VAT or Import duty  if you sell in the uk we collect the VAT for the UK government  at 20% this was similar for EU but the it had to be documented differently.

All non EU countries a customs sticker ( sorry declaration) and it's up to the receiving countries postal service to pick up the duty.

As I have been doing this for a few years as far as I am aware Canada was not part of the EU so the same rules apply to them as the US or Japan countries we deal with commercially for many years, when we send out an order we included copies of the invoice so the receiving customs can collect the correct import duty from the goods recipient before delivery.

I have been dealing with Ultracast for many years and I am not sure where the problem is ALL the snags are EU based not the "rest of the world" 

1 take the order

2 send the order out with custom declaration (job done) for the seller

3 Royal Mail collects the import duty

4 "simplies" nothing to get the nickers in a twist about 

 

To the Moderators " can i have a proper rant please " will try not to use to many sweary words 

Apologies to Bob for adding italics in the quoted post...  [edit: and the reply is not aimed solely at his post, which is quoted for illustration of the point]

 

Unfortunately, this is no longer the case for UK VAT due on foreign sales.

 

HMRC have, in their infinite wisdom, decided that as from Dec 16th this year UK VAT due on foreign sales with a value not exceeding 135GBP must be collected at point of sale, and that therefore the seller must register with HMRC for VAT. Of course, being HMRC it can't be a simple process, so the rule doesn't apply where the seller is selling to a UK VAT-registered business (where the VAT will be collected via reverse charge) or via an online market place (where there is no limit on value, the OMP operator will be deemed to have made the sale and will therefore be responsible for collecting the VAT.... unless the sale is to a VAT registered business... simple, isn't it? ).  What will really hit the 'mom and pop' operators is the abolition of Low Value Consignment Relief (15GBP or less).  If I were such an outfit, would I accept ad hoc direct orders from the UK in future? No. The simplest option would be to only operate via an OMP.

 

The rule change applies to all sellers, wherever they are in the world and in the strictest sense is not due to Brexit - although the event has afforded HMRC a convenient opportunity to implement it. Quite why the previous system of assessment and collection at the point of import could not be continued is beyond me - HMRC says it is to 'make collection more efficient'. To the uneducated eye, it seems to do precisely the opposite. Border checks will still have to be done to determine whether the VAT has been paid and if not, a demand will still have to be issued - presumably that demand will now go to the supplier, who will have to contact the purchaser for payment, and the delay in recept of the VAT due will increase. Typical HMRC bollocks, as Bob says.

 

Information from the UK Gov here.

 

Edited December 17, 2020 by Sepp

[jenshb]

If the VAT is charged on point of sale, surely, that should mean that the Royal Mail will not charge the VAT and slap their £8 handling fee on top of it - including the postage in the VAT calculation?  Even if the point of sale adds a fee for the extra work involved (providing it is reasonable), wouldn't that make the overall purchase not much more expensive than ordering from abroad currently?  From my own experience, I don't have any problem paying the VAT on the product, as I would be doing that of buying the same product locally if it was available, but the £8 fee to Royal Mail for the privelege - and their addition of including the postage in the cost is what annoys me the most.

[Radub]

1 hour ago, jenshb said:

If the VAT is charged on point of sale, 

 

But that is PRECISELY the issue! Why would anyone outside the UK bother to collect VAT on behalf of Her Majesty and then go through the bother to process it and pay it to UK Revenue, with all the "joys" associated with sending money across EU borders?

I used to operate VAT when I had my own business. Let us just say that "fun" and "easy" were not the words one would usually associate with it. 

Most traders will just let the end-user in the UK to deal with it. Heads will hurt, tempers will flare. 

Radub

 

[Derek B]

Taking a pragmatic view, I wonder if the UK postal service will alter the rules of sending postal 'gifts' because of this?

 

As for HMRC and being VAT registered, quite a few smaller businesses may not earn sufficient profits to become VAT registered (as it presently stands), so it will be interesting to see how this will develop?

 

Derek

[Sepp]

@jenshb: Yep, I believe that is the intention - however, in practice I think we'll still see plenty of Royal Fail's letters with menaces.

 

@ Radub: I agree, VAT was such a joy to administer; glad I'm out of it now.  I wouldn't join in the new game... other than trading via Fleabay etc., who will have to (and to an extent already do have to) do the work for me.

 

 

Edited December 17, 2020 by LSP_Mike
removed political content

[LSP_Mike]

I realise we are walking a thin line here, but let's NOT stray.

[Sepp]

Oops, sorry - I'll go stand in the corner for half an hour

[cbk57]

I saw this discussion on another modeling forum also where someone wanted to order from Hiroboy from the EU.  I am guessing this is going to compound across the Brit and Eu economy and it sounds bad.  I feel for those on both sides as it is not going to be good for a lot of people and businesses over there.  I am taking no position on whether this should happen or not or the political side of it however if our hobby’s is typical of all goods and services moving between Brittain and the EU there may be some tough times for a while as people adjust to this.    

[Radub]

3 minutes ago, cbk57 said:

I am taking no position on whether this should happen or not 

 

It does not matter anymore what people think about Brexit. The horse has bolted, it is too late to lock the barn doors. UK left the EU at midnight on 31 December 2019. The UK and EU had until 31 December 2020 to reach agreements on a multitude of issues affecting a wide variety of aspects of people's lives. This "transition period" is coming to an end in two weeks with no agreement in sight. 

Cross-border VAT and customs charges are only a part of the negotiations, which have an impact on the commercial side of our hobby. I can see more issues on the manufacturing side of the hobby as many UK-based companies are using materials and tools from the EU. 

Radu

[jenshb]

4 hours ago, Radub said:

 

 Why would anyone outside the UK bother to collect VAT on behalf of Her Majesty and then go through the bother to process it and pay it to UK Revenue, with all the "joys" associated with sending money across EU borders?

 

 

If it would make you sell enough to the UK to make it worthwhile, then why wouldn't they?  If that arrangement only applies to sales to private customers, not businesses, I can see why they would stop doing that if they don't think it is worth the hassle.