FotoImpex/Adox and UK since Brexit

ADOX Fotoimpex · Apr 4, 2021

AgX said:
I am confused.

A retailer within the EU selling to a consumer outside the EU is not obliged to add EU-VAT.
Thus who can nonetheless charge this plus a punishment fee from the seller and and on what legal basis?

Adding UK tax on such sale to the UK and transferring such to UK fiscal authorities is a service for UK consumers to enable them such import.
How can not doing so affect the EU retailer and not the importing UK-consumer?

I don´t really know. I guess the situation will be that inside the UK the debt will acumulate and be valid under UK law but it is a question if this will be helped to collect by EU member states.
So you might get away with it by not entering the UK but such schemes are not an option for us. We want to do things in compliance with the respective laws and if they are incompliable, I guess we have to cease this part of the business.

AgX · Apr 4, 2021

You mean that if you do not collect the UK taxes for UK customers, the UK authorities then will not claim those from your UK customer, but instead will put you as german retailer in debth to UK treasury, which then likely would hamper any business activity with the UK of your company itself or when travelling as company representative to the UK?

ADOX Fotoimpex · Apr 4, 2021

AgX said:
You mean that if you do not collect the UK taxes for UK customers, the UK authorities then will not claim those from your UK customer, but instead will put you as german retailer in debth to UK treasury, which then likely would hamper any business activity with the UK of your company itself or when travelling as company representative to the UK?

Thats how I understood it. Akward isn´t it?

AgX · Apr 4, 2021

My guess is the british idea was to save own administrative costs. The same time transferring tax claiming from a authority where it was well established and likely effective to small ineffective businesses, in the end raising the overall costs.

From what I learned of import/export under Brexit circumstances this rise of handling/administrative costs (especially due to ineffectiveness of the prescribed processes) is a general issue of wholesale too.

Added to this are personal issues of labour permits etc.

AgX · Apr 4, 2021

Here a british view from back then...

https://bit.ly/3cQZEs0

foc · Apr 5, 2021

My wife works for the Irish Revenue Commissioners and I have asked how can the UK HMRC enforce the collection of taxes on a company or individual that is not in their jurisdiction.
The simple answer I got was, as they are not in the EU, they can't.

Instead of making it easy to trade with the UK, it appears to be an impediment.
Some smaller EU online businesses have suspended or stopped supplying the UK
And likewise, some UK inline businesses have done the same with the EU.

AgX · Apr 5, 2021

foc said:
My wife works for the Irish Revenue Commissioners and I have asked how can the UK HMRC enforce the collection of taxes on a company or individual that is not in their jurisdiction.
The simple answer I got was, as they are not in the EU, they can't.

That was my argument too above, but the reply by Mirco shows how in effect the UK authorities may enforce such collection.

A non-UK retailer thus either plays this game or looses a customer to a competitor maybe joining that game.

pentaxuser · Apr 5, 2021

AgX said:
Here a british view from back then...

https://bit.ly/3cQZEs0

Wow that's an old one> It seems to date from about the same time that in British films Anton Diffring was the most overworked nazi in the business

A lot has changed since then I feel

pentaxuser

Arcadia4 · Apr 6, 2021

The £135 VAT limit by HMRC is global so even Captain Kirk was having problems...

https://yorkshirebylines.co.uk/brexit-to-boldly-go-where-no-vat-inspector-has-gone-before/

richyd · Apr 6, 2021

I hadn’t realised that his £135 limit rule for VAT existed until this thread. I looked at HMRC site from what I understand is that it was introduced to try and cover the VAT charges for online purchases and the limit of £135 was used as it is the limit for tariff free imports. The idea is to limit the amount of customs processing. Well, there is an easy answer to that and it has just been taken away.

I do not see, though, how HMRC can have any jurisdiction over foreign entities to register as UK tax entity and collect taxes on their behalf. I don’t see what there is to prevent a supplier overseas to the UK to bill, as they would anyone else they are exporting to, the amount less any local taxes, irrespective of the total value, and and leave any taxes due on import to the responsibility of the importer. This is how all international trade operates. As HMRC say this is for online purchases, then I presume if someone orders on the phone or via email you could also say it was not an online purchase and HMRC can take a running.

AgX · Apr 6, 2021

richyd said:
I do not see, though, how HMRC can have any jurisdiction over foreign entities to register as UK tax entity and collect taxes on their behalf.

As indicated above by me and by foc, there is not.

richyd said:
I don’t see what there is to prevent a supplier overseas to the UK to bill, as they would anyone else they are exporting to, the amount less any local taxes, irrespective of the total value, and and leave any taxes due on import to the responsibility of the importer.

As I tried to unfold above, the UK authorities see the exporting retailer as part of the import to the UK process. As he is. I mean, the importing customer could have a 2nd residence in the foreign country and import to himself. (The example seems weird, but I chose it to show that the exporting retailer is involved.)
Now the UK authorities involve the exporting retailer in that tax collecting. How in effect they can do so I explained above.

The annoyed retailer might consider going in advance to an international court that may have jurisdiction on such and have them consider the approach by UK authorities.
Or once action is done against his interest in the UK going to a UK court.

But as you I only learned of this by this thread. And I find it puzzling why UK authorities not just could act as, to my understanding, do all EU fiscal authorities in handling foreign imports by consumers.

cmacd123 · Apr 6, 2021

of course the UK authorities can just refuse to allow a shipment to enter the UK territory if it does not meet all the "rules" (including having the UK taxes paid. perhaps they could go back to the 1700s and have the tax amount paid by stamps applied to to the package.

AgX · Apr 6, 2021

Not likely as the tax transfer process likely only starts at sending the goods, and the way the billing is handled the goods would likely arive sooner. That is why Mirko had it about him getting into debth at UK fiscal authorities. A debth he sooner or later will have to balance.
The alternative would be to put the parcel on hold until the fees are paid, by whoever. This however practically would mean even more hassle on british side than collecting fees COD at delivering to the british consumer...

foc · Apr 6, 2021

cmacd123 said:
of course the UK authorities can just refuse to allow a shipment to enter the UK territory if it does not meet all the "rules" (including having the UK taxes paid. perhaps they could go back to the 1700s and have the tax amount paid by stamps applied to to the package.

It might be a very simple but effective solution. Buy digital stamps/barcodes on line from HMRC in the UK and put them on your EU package (just like I buy a postage label from my postal service and if needed it will include the customs cn22 form).
Like all things, I am sure there is a software solution somewhere. My son was looking at a software solution for his website.

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