UK folks, how can I make shipping minis to you less onerous?

[1000foot]

I've been holding off on running a kickstarter for some minis I'm producing until I saw how the Brexit situation was going to shake out. Now that the dust has settled (as far as I can tell), it looks like I need to charge 20% VAT +shipping fees.

Let's say I have a pledge of £29.00 for 10 figures. VAT by itself is £5.80. How difficult is that VAT going to be to swallow? Are you accustomed to it? Is there a way to lessen that fee I'm not realizing?

Just want to make this venture as UK/EU friendly as possible!

[Antonio J Carrasco]

The problem now is not VAT per se, but the chance of an UK pledger to be charged VAT twice: by you and by UK customs. That is what is nuts. In theory, from July 1st a system will be in place in which VAT is charged at the point of origin, i.e EU vendors will charge their local EU VAT and UK vendors theirs. There will be paperwork still, but not customs, and therefore no risk of duplicate VAT being charged nor handling fees by the local postal services.

[vexillia]

You will have to charge 28 different VAT rates by the middle of this year.  1 for the UK and 27 one for every country in the EU "Single Market". 

Have fun.

[zemjw]

It's not £5.80, unfortunately. p&p is subject to VAT as well, so its

mini cost + p&p + ((mini cost + p&p) x 20%) + import duties + handling charge

There's a big thread on EU folks buying from the UK just now, and it's the same for us buying from the EU - https://leadadventureforum.com/index.php?topic=128944.0

Anything above £15 is subject to import duties. Handling charges are starting to fall into the "death and taxes" category in terms of certainty

I pretty much stopped buying anything from the US when they tightened the rules (and shipping charges shot through the roof), and I suspect it'll be the same from the EU.

You pretty much have to assume you'll end up paying at least 50% more than you think you will (and that thread has examples of much more than 50%) and ask yourself if you really need the shiny figures

[Elbows]

As best as I can tell VAT is...pure and simple robbery.  The ability of individual parties in the pipeline to arbitrarily charge/adjust stuff is absolutely insane.

US shipping to any overseas country is expensive, hugely when compared to other countries which have subsidized shipping (wherein the cost of shipping abroad is absorbed by their government and in many cases, the government of the receiving country).  Shipping from the US, we simply pay the full price.

Add onto that the VAT styled nonsense and the total cost becomes obnoxious.

[bluewillow]

Each country in the EU also has different values before it is applied, here in France €20 before handling and VAT charges are applied, or €50 if a gift.

The biggest point is do not use a courier to ship, the various country post offices are the cheapest for handling fees.
All of the courier companies charge between €15-35 handling fee, plus the VAT.

As of July all of the EU is moving to zero, so everything will incur a handling fee regardless of value, gifts including post will still be exempt up to €40.

Cheers
Matt

[stone-cold-lead]

I pretty much stopped buying anything from the US when they tightened the rules (and shipping charges shot through the roof), and I suspect it'll be the same from the EU.

Same here. Years ago I stopped checking US sellers on Ebay and generally don't consider US retailers an option. Now it's the same for mainland Europe for me.

[Andrew Rae]

I've been holding off on running a kickstarter for some minis I'm producing until I saw how the Brexit situation was going to shake out. Now that the dust has settled (as far as I can tell), it looks like I need to charge 20% VAT +shipping fees.

Let's say I have a pledge of £29.00 for 10 figures. VAT by itself is £5.80. How difficult is that VAT going to be to swallow? Are you accustomed to it? Is there a way to lessen that fee I'm not realizing?

Just want to make this venture as UK/EU friendly as possible!

First thing to understand is that UK and EU VAT regimes are now entirely separate. To make a Kickstarter both UK and EU VAT friendly will require different processes. UK and EU import VAT rules are definitely not the same anymore.

Assuming you are not resident in the UK:

For the UK, as soon as you make a sale/receive a pledge from a UK customer/backer, you must register for UK VAT. In practice, you would do this before you launch your Kickstarter. You cannot charge UK VAT unless you are registered for VAT in the UK, and you must only collect VAT for sales under £135. UK VAT registration for foreign sellers is not optional - there are fines and you can be registered without your consent. When registered, you must complete a quarterly VAT return and pay any VAT due.

However, if you don't register there will likely be no consequence for your customers/backers. Royal Mail no longer collect any VAT for consignments under £135. Consignments over £135 may be subject to VAT, duty and a handling fee, collected by Royal Mail or a courier.

This is the text I got from HMRC about VAT noncompliance from foreign sellers:

Existing fiscal compliance checks at the UK border will continue, including checks to confirm the correct valuation for goods declared at import.  In addition to risk-based checks at the border, we will continue to carry out extensive risk-based compliance activity away from the border using various data sources to identify and tackle non-compliance.
 
We will use a range of new and existing compliance responses in order to tackle issues of noncompliance by overseas businesses.  We are also working very closely with those who haven’t registered to ensure they can comply with the changes.

Make of that what you will. Seems pretty lax if you ask me, but then there is a lot more digital data sent with all mail now, so maybe they have ways and means of enforcing things.

Assuming you are not resident in the EU:

For the EU, until July you can't really collect EU VAT during your Kickstarter/at point of sale - there is currently no concept of 'distance sales of goods imported from a third [non-EU] country' in EU VAT law. So import VAT and a fee (can be very high depending on destination country) will be collected from the customer, by the postal service/courier, on all consignments over 22 Euro (10 Euro for Denmark; zero for Sweden). This collection is pretty patchy, so sometimes a consignment will be delivered without any VAT or fee being collected. If your product is in the EU prior to sale/KS, it's a whole different game.

From July, you may (it's not compulsory) register for the EU Import One Stop Shop scheme, which allows you to collect EU country VAT, at the customer's rate, at the point of sale/pledge for consignments up to 150 Euro. However, if you are not in Norway (or the UK), it is likely you will have to appoint an EU-based intermediary, who will be jointly liable for VAT, and will be the first port of call for the VAT man if you don't pay your bills. When registered, you must complete a monthly VAT return and pay any VAT due.

Alternatively, you can ignore EU VAT registration, not collect VAT at point of sale and have the postal services/couriers collect import VAT from the customer as they do now, except it will be collected on all consignments regardless of low value. Collection will probably be more comprehensive from July, due to changes in the system. Import VAT/duty/fees will also be collected from the customer by the postie, for consignments over 150 Euro.

[Andrew Rae]

Let's say I have a pledge of £29.00 for 10 figures. VAT by itself is £5.80.

One more thing - Kickstarter doesn't really do VAT as such. So if your pledge value is £29 to all backers, regardless of their country, that will be the gross price for UK backers, and (currently and unless you register with the IOSS) effectively the net price for EU backers.

That is to say, you must not collect UK VAT as a separate transaction - it is effectively included in that £29 pledge. You'll probably need to issue your UK backers with an invoice listing the VAT paid. If you charge shipping costs as a separate transaction post-KS, you must collect UK VAT on that payment too.

For the poor EU backer, they will get import VAT charged (collected by their postie) on that £29 plus the shipping costs. Along with the handling fee.

So your UK-bound rewards gather 16.7% less revenue for you, but come with no extra costs to the UK backer, while EU-bound rewards get you all that £29 revenue, but the EU backer pays a lot more in the end.

[AndrewBeasley]

To be honest it's gotten such a mess with climbing postage costs, VAT and collection 'fee' charges that I've given up with foreign kickstarters and direct sales from manufacturers and even on eBay its U.K. only rather than that stupid 'default' button.


I know I'll miss out on neat things but it's simpler for me.


One thing I would say though is if you can get a U.K. based distributor (or licensed manufacturer) please look at lead times.  The last couple of KS bits I was interested in had a delivery time of 12-18 months!

[Kitsune]

To be honest it's gotten such a mess with climbing postage costs, VAT and collection 'fee' charges that I've given up with foreign kickstarters and direct sales from manufacturers and even on eBay its U.K. only rather than that stupid 'default' button.

Me too. Dealing with admin, VAT “knowledge” and potential hidden charges is too much of a headache for something that’s my hobby.