UK gamer questions re: VAT and Shipping

[FifteensAway]

Wondering if those of you in UK who must pay VAT on items purchased in UK also have to pay VAT and shipping on items brought in from outside UK?

I ask because I keep wondering at so often hearing shipping costs keep people from buying from overseas when based in UK.  I have often bought from overseas - UK, Australia, Canada, New Zealand, and a recent order out of Italy (Baueda).  While shipping has gone up as a percentage of an order from overseas, I still make the buy if I need the figures (and there is not a viable US alternative).

If you have to pay both the shipping and the VAT for international orders, then certainly that will get prohibitively expensive.  I'd certainly give serious pause to buying from UK if I had to pay both the shipping and the VAT.

Just curious.  Thanks! 

[vodkafan]

The problem is not shipping or VAT it's the customs charge. Your parcel is withheld and you get a notification that you must pay the charge , but also (and unfairly) the Post Office also levy a fine for holding your parcel. It's like blackmail.

[fred]

Yep, its the custom charge, which is usually a really significant percentage of an order.

I think VAT starts to be charged at around £15 these days (certainly below £20). VAT is 20%, which is barable, but the admin charge for the Post Office to process taking the money off you is around £8, so you can easily end up with a £12 charge on a £20 order, and on top of that you will have had to pay shipping too.

The larger the order you can place the better in many ways as the  admin charge becomes a much lower percentage of the total cost.

There is a bit of a lottery to all of this too, as not all parcels get charged.

I’ve noticed that shipping from the US to the UK seems to be high now.

[vexillia]

One small detail - VAT is charged on both the value of the goods and shipping.  The latter is usually taken from the value of the stamps etc.

[TheBlackCrane]

The larger the order you can place the better in many ways as the  admin charge becomes a much lower percentage of the total cost.

There is a bit of a lottery to all of this too, as not all parcels get charged.

This is the thing - when I have ordered from Khurasan Miniatures to the UK I try to do big orders, makes the customes charge much more palatable (insofar as it is palatable at all) - but I think 1 in 3 orders just arrive without being held at all, and no pattern as to why one and not the other.



(Don't know what will happen when we leave the EU though... I'm assuming for the time being nothing, and the real change will come at the end of December this year? But I must admit to having lost track of things like postal implications, which considering I often send parcels to friends on the Continent I really ought to have kept tabs on. Possible that all parcels from current EU nations get customs charges too?)

[FifteensAway]

Curious, so it is customs over shipping costs?  Wonder why so often it is expressed as a complaint against the postal system - or do UK customs and postal service occupy 'the same ground' as it were?

Well, we have 'sales tax' here in the US where we pay a percentage based on the 'local' rate.  However, many online shippers do not charge the tax to 'out of state' buyers and we have to add in an amount to our taxes to account for what we've ordered that didn't get taxed - on an honor system of sorts.  I wonder if your customs charge is of a similar nature?  Or, maybe, since it is unwieldy to search every package, your customs service selects certain packages for investigation and charges based on those that get selected - I hear some of your packages are poked and prodded with resultant holes when delivered. 

I expect at some point all online shippers will be required to collect and pay the sales tax - at least within the US.  And, yes, I do my best to estimate what I spent in a given year and add it to my taxes.  I'd rather that than get a fine with interest and penalties!  Challenge is keeping track of who did and did not charge taxes since ordering is a bit hap-hazard and catch-as-catch-can.

Yeah, Brexit is a potential mess of mind boggling proportions. 

[dadlamassu]

Wondering if those of you in UK who must pay VAT on items purchased in UK also have to pay VAT and shipping on items brought in from outside UK?

I ask because I keep wondering at so often hearing shipping costs keep people from buying from overseas when based in UK.  I have often bought from overseas - UK, Australia, Canada, New Zealand, and a recent order out of Italy (Baueda).  While shipping has gone up as a percentage of an order from overseas, I still make the buy if I need the figures (and there is not a viable US alternative).

If you have to pay both the shipping and the VAT for international orders, then certainly that will get prohibitively expensive.  I'd certainly give serious pause to buying from UK if I had to pay both the shipping and the VAT.

Just curious.  Thanks!

For purchases Within the EU we pay VAT at the rate charged in the country of sale, we also pay VAT on the postage. We do not pay the Post Office or HMRC charges on these purchases.

If we buy from outside the EU we pay for the item, postage, customs duty, VAT and post office charge.

My son is currently serving abroad and when he buys from the UK he always asks for the VAT to be deducted and in most cases he gets the 20% discounted. This often depends on the size of the business. Under UK law small businesses do not have register for VAT until they reach a certain limit and so must sell at full UK price including VAT.

So if buying from EU countries for delivery outside the EU always ask whether they deduct the VAT for sales abroad. 

It is a complex subject and probably from December we will pay the Post Office charge on EU purchases.

[Marko]

Your parcel is withheld and you get a notification that you must pay the charge , but also (and unfairly) the Post Office also levy a fine for holding your parcel. It's like blackmail.

Blackmail is rather a strong word. I prefer to think of it as extortion! 

[mcfonz]

It becomes more complex when you consider tax codes.

Aren't some products tax exempt when posting? Like documents etc?

[katie]

"Under UK law small businesses do not have register for VAT until they reach a certain limit and so must sell at full UK price including VAT."

No, they sell at their normal price but don't charge VAT at all to anyone.

However they DO have to pay VAT on things they themselves buy.

[dadlamassu]

No, they sell at their normal price but don't charge VAT at all to anyone.

However they DO have to pay VAT on things they themselves buy.

And I thought they passed the VAT on to the customer by including it in their pricing.  Are you saying they do not pass on the VAT that they pay? How nice of them to cut their profits.

[Norm]

I'm in the UK, so if I buy something from Europe - our VAT is harmonised throughout Europe, so everyone's systems is geared up to collecting VAT at the moment that I make payment for the product. Our import / export customs are also harmonised. So I bought a boardgame from France earlier this year and I just paid for the game (VAT included) plus shipping, the shipping was just 7 Euros.

However, if I buy a boardgame directly from the U.S. At the point of making payment, of course their systems cannot collect VAT on behalf of our government. Instead, I will pay an import duty. But that duty has to be collected, our internal postal system does that, but of course they levy an admin charge for doing so, which I think is around £10 at the moment.

So say I order a boardgame from the US. depending on the value ordered, I might have to pay say £18 import duty and on top of that the postal service add their £10, so for me to buy the game, I pay for the game plus overseas shipping (I was charged $50 shipping the last time I did it), plus customs import duty plus a £10 admin fee. For this reason it often isn't worth me doing even the discounted pre-order deals with US games company as the shipping / duty / admin costs become out of all proportion to the game - it is far better for me to support a UK bricks and mortar store, who have more efficient ways to bring all those costs down on their bulk order - the charge obviously gets passed on to me, but it is more acceptable and I get to support a UK store. I have to wait a little longer for the newly released games - but it has forever been thus.

[fred]

And I thought they passed the VAT on to the customer by including it in their pricing.  Are you saying they do not pass on the VAT that they pay? How nice of them to cut their profits.

To a degree, but it’s not really the same, as the small supplier is only paying VAT on materials not other costs. Perhaps a little example would help
Larger, VAT register company
Materials £1, Labour £1, Profit £1, giving a net price of £3, but VAT needs adding to this (at 20%) giving a total price of £3.60

For a smaller non-VAT register company
Materials £1.20 (as they must pay the VAT on these), Labour £1, Profit £1, giving a final price of £3.20

Some companies that buy a lot of stuff will choose to VAT register before the threshold as it is worth it to be able to claim the VAT back on their purchases. And not all things attract VAT - for example books are a exception.

[Arrigo]

The other side of the coin is that when you order from outside your custom zone, usually you are not charged VAT. For example I order a GMT wargame from US, I am not paying the California Sales Tax (US VAT equivalent). Then when the games reach Italy... tricky part... sometimes the parcel is just delivered without any surcharges. Sometimes... the postman or delivery man ask me for the money the custom office has slapped on it. In Italy the custom duty includes VAT (not that bad), and then handling charges (that also includes VAT). The latter are the killer, usually 50% of the fee...

VAT depends... boargames, if they includes dice receive a bigger VAT, it they are not (plenty of ziplocks) they are simply considered books with very low VAT.  Sometime the VAT cover shipping (it is basically illegal... ecause the US government has levied their sales TAX on shipping), but recently I have see companies putting only the value of the games and not shipping so we tend to be saved...

One thing is that for now we are not paying any tariff on our precious <use gollum voice> goods. Just VAT and handling.

Sometime the customs play illegal games, like keeping your parcel there for too long and then asking you for the storage money. Happened few years ago with a digital camera, a gift from a Japanese friends. They played all possible games, they asked both of us to pay for custom clearance, and did not even warned Fed EX of the necessity to pay the custom duty for days so to get the extra money... (the first three days are free... then if you are slow in clearing the package you pay). FedEx contacted us saying that the Customs were clearly breaching the law (their customer representative told me they had done that regularly in that period) and Fed Ex would have gone through a lawyer. Basically they were suing them for... extortion... I got the storage charge refunded my friend the whole customs refunded. From my chat with the Customer Representative from FedEx I got the impression it was a large scale extortion scheme... now they are more 'reasonable'.

Btw, my experience with Khurasan is a bit the opposite, small orders pass under the radar, larger orders from US got stopped... but then... once I got a big box (Atlanta is Ours and Roads to Gettysburg II) from MMP and no custom...    basically... random stuff.

[Matakakea]

I had a discussion with a senior City of London accountant over what the Post Office's handling actually involve, and what it would cost them. His profession conclusion on their £8 'handling fee' ? "They're on a nice little earner there".

Quote from: vodkafan on January 04, 2020, 09:49:42 AM
Your parcel is withheld and you get a notification that you must pay the charge , but also (and unfairly) the Post Office also levy a fine for holding your parcel. It's like blackmail.

Blackmail is rather a strong word. I prefer to think of it as extortion! 

Last time I went to collect a package from the Mount Pleasant parcel office I told them I was there to pay the ransom. That got me a scowl, I didn't care. £22 of which £8 was for the PO.  :'(