Import VAT woes from the USA

[sɐǝɹpu∀]

I think the problem with the PO's admin charge is that we only measure it against low value items but tend to disregard it on higher value ones. In reality, they have to perform the same amount of work in terms of customs declarations and VAT returns regardless of value.

Still... £8 is a bit steep - the postal worker on minimum wage doesn't need an hour to collect it.
Why can't we pay the charge online for, say, 2 quid? Max.

 

[SeanC]

Still... £8 is a bit steep - the postal worker on minimum wage doesn't need an hour to collect it.
Why can't we pay the charge online for, say, 2 quid? Max.

I did a little bit of digging on this a while back. According to RM, the £8 represents a recovery of the full cost of processing mail subject to HMRC charges, so therefore includes the Heathrow processing operation and the cost of returning unpaid items to senders etc. If it were the marginal cost per item I would suspect the charge would be a lot closer to the £2 you suggest.

 

[sɐǝɹpu∀]

Royal Mail are planning to replace their red cards with this:

 

[Cornishman]

Royal Mail are planning to replace their red cards with this:

HaHa!

 

[Chris]

I work in the NHS, I've seen that screen far too often over the last couple of days!

 

[Deleted member 30]

Note and appreciate (for now at least) that you Brits can freely import from EU at no additional cost. I'm in the poop no matter from where I get my gear. BUT, and this is for once a positive but, there's no VAT on anything below 350 NOK incl postage, equivalent to ~32 pounds at present, gifts below 1000 NOK. VAT is calculated as in the Croatian case @morr, 25% of value plus postage, plus handling fee of 15 pounds. Duty only imposed on clothes and tobacco/alcohol AFAIK.

Noted for future reference.

 

[LeeBot]

Still... £8 is a bit steep - the postal worker on minimum wage doesn't need an hour to collect it.
Why can't we pay the charge online for, say, 2 quid? Max.

I agree £8 sounds a bit steep but there's perhaps a slight simplification of the costs involved there.

Firstly, it's not actually a minimum wage job and I don't think the parcel just appears on a shelf in the office. There's probably a certain amount of paperwork and logistics separating those parcels, storing them, notifying customers of the charge, dealing with complaints about the charge or some customers simply not understanding what it is, the actual transaction, maintaining that part of the website, and transferring what probably amounts to quite a few quid and more paperwork between themselves and HMRC. Then there is a certain amount of subsidy for cases were the customer decides not to bother getting it - RM has still incurred a cost and like any business it makes sense to try and recoup that cost.

Are there any delivery companies that do it for much less? I know that Pitney Bowes charges way more and compounds it by most Ebay sales being made using PayPal's sometimes questionable idea of what current exchange rates are.

 

[LeeBot]

Firstly can I say VAT and import duty are two totally different things.

The reason you have had to pay VAT on your razor is because....

1) Anything over £15 is liable for VAT (well it was the last time I looked)
2) (And this is the killer) The postage is included in the total sale of the item and then the VAT is added to the total sum, so this will take you over the VAT threshold as well.
So if your purchase is say £10 and postage is £9.00 you will be charged the VAT on £19.00

If your purchase is £10 I'm pretty sure you wouldn't be charged VAT. The cost of carriage is only took into account if the item itself is over the £15 threshold.

Example
Item is £14 and postage is £10 = No VAT on total price of £24
Item is £16 and postage is £1 = VAT @ 20% on total price of £17.....plus your £8

It sounds strange and unfair to work VAT on the postage like this so I'm guessing there's a possible VAT fiddle there that I'm not smart enough to work out.

 

[Deleted member 476]

I used to work in a Freight-Forwarding Brokerage and leebot is right on the money and since Customs rating and brokerage is a qualifying career position with manual human input, £8 actually sounds quite reasonable for the various inputs and costs involved. The problem is the threshold for incurring the duty and taxes is too low. I would be curious knowing when those thresholds were last updated because in Canada where we have a similar problem and its been decades.

 

[Slant_Fan]

Living in the USA I only, AFAIK, have to pay import fees on items costing over $300.00 USD. Sometimes I get by without paying on items costing that or more. OTOH, here we can't walk into a hospital and get treated without insurance or out of pocket cash. Just something to consider.

 

[Dobbo25]

If your purchase is £10 I'm pretty sure you wouldn't be charged VAT. The cost of carriage is only took into account if the item itself is over the £15 threshold.

Example
Item is £14 and postage is £10 = No VAT on total price of £24
Item is £16 and postage is £1 = VAT @ 20% on total price of £17.....plus your £8

It sounds strange and unfair to work VAT on the postage like this so I'm guessing there's a possible VAT fiddle there that I'm not smart enough to work out.

I can see where you're coming from on the Example 1 and you are correct, but Example two will include the postage cost in the VAT calculation, a real bummer but it is in the small print.
I questioned the amount on a ATT head I had bought as the VAT was more than it should have been. I was informed that the postage was included in the VAT calculation but not the handling fee and it worked out correct.
It has happened to me on numerous occasions I have bought from the USA and Canada.
Hopefully it might have changed since I last bought something outside of the UK

They even tried to get me once on an alteration I had done on to a Wolfman. Customs, Parcel force rip off fee etc. I had to pay it all again to release it, just so I could claim it back from Customs.

 

[Chris]

They even tried to get me once on an alteration I had done on to a Wolfman. Customs, Parcel force rip off fee etc. I had to pay it all again to release it, just so I could claim it back from Customs.

Technically that could have been classed as a repair, in which case VAT would only be payable on the repair cost not on the value of the item.

 

[R181]

Living in the USA I only, AFAIK, have to pay import fees on items costing over $300.00 USD. Sometimes I get by without paying on items costing that or more. OTOH, here we can't walk into a hospital and get treated without insurance or out of pocket cash. Just something to consider.

Wish I knew what the threshold really was here in Ontario Canada for having to pay the 13% HST on imported goods. I just had two items shipped USPS from the US. One item I had to pay the HST on and the second which was a repair and the repair cost was more than the purchase price of item one came through no HST owing. I have to admit though that customs has been pretty good and most come through without owing HST or import duties owing.

You bring up a good point about health care. Our system is not as inclusive as the NHS but I know I rather pay more taxes and just present my card at the hospital to be treated.

Bob

 

[Dobbo25]

Technically that could have been classed as a repair, in which case VAT would only be payable on the repair cost not on the value of the item.

You know HMRC Chris, because it had the full cost of the razor on the customs label, even though it stated it was a repair (which was free) they tried their hand. I got the money back no problem, its just going the rigmarole because some lazy sod can't be bothered to read the label properly.

 

[Chris]

You know HMRC Chris, because it had the full cost of the razor on the customs label, even though it stated it was a repair (which was free) they tried their hand. I got the money back no problem, its just going the rigmarole because some lazy sod can't be bothered to read the label properly.

The rotters, they were probably trying it on in the hopes that you didn't bother to claim it back.