FotoImpex/Adox and UK since Brexit

[Craig75]

It isn't the item that is taxed, it is the sales transaction.
And if the taxation system is in the nature of a Value Added system, the end user pays tax but there is no net tax is effectively paid by anyone else in the chain.
If properly designed, and efficiently administered, sales taxes are a very fair way of raising revenue.

it is the item that is taxed because goods and services have different bands of sales tax from 0% to 20% at least here in UK.

 

[Craig75]

Well having read the very clear and helpful explanations from people on this thread this seems like a world of madness. So small retailers and lower priced items are punished more than high ticket items from Euro big business. Yes that sounds totally fair.

I've ordered from Dv247 and Grooves-inc in Germany since brexit with zero issues as they are big businesses with a UK registered office even though the items came from Germany and included VAT but I cant order from fotoimpex without having to create a big order,

In my tiny mind it should be the other way round - small euro retails will have specialsied goods with limited or no distribution in UK whereas big Euro retailers are just selling the same goods as in the UK but at a lower price. But the unavailable goods get punished whilst the readily available goods dont....

 

[MattKing]

And best of all like alcohol and tobacco taxes they are regressive. The poor have no where to run. Between, booze, smokes, lottery and government sanctioned marijuana, there's hardly enough left to binge on fast food.

Actually, no.
A well designed sales tax (note the emphasis) is the least regressive tax available, because it targets those who can afford more.
So called luxury taxes may be the best taxes, but if the poor are only able to "run to" "booze, smokes, lottery and government sanctioned marijuana", then I'll agree that that will be defeated.
If only they had good food and reasonably priced accommodation to "run to".

 

[MattKing]

it is the item that is taxed because goods and services have different bands of sales tax from 0% to 20% at least here in UK.

It is still the transaction that is taxed, even if the rates vary.
It helps if you have simple rates - in Canada, our Goods and Services tax is a flat 5%, although some provinces have combined their sales taxes with the GST, resulting in an HST. The fundamental advantage is that the GST or the HST are value added taxes, which means they have no net effect on the costs of manufacturers, distributors, retailers or anyone else in the distribution chain.

 

[cmacd123]

If properly designed, and efficiently administered, sales taxes are a very fair way of raising revenue.

they are an effective way of raising revenue. by design they do tend to fall more heavily on those folks of modest means. If you are working poor, you do tend to have to spend all your income on taxable items and so you get to add (here in Ontario) 13% to the price of almost everything you buy. (here they call it HST) if you are well off, your money may go to investments and savings that do not incur tax. someone of modest means thus sees 13% of their buying power taxed away right off the top before income tax.

now in most of these systems, each step in the chain charges and remits the tax based on the full selling price, but gets a rebate for the tax that they paid on the goods or materials that they purchased. (imagine how complex THAT is for a smaller company, trifling for a big company with massive accounting systems)

this is not a comment on the new arrangements in the UK. the kicker is that many of the couriers have been know when presented with the requirement to file paperwork, tend to charge (Taxable!) fees to do so, which can often not only exceed the tax, but also the value of the goods.

e-bay has likly gone to tehir "global shipping system" just so cover off the obligation to collect taxes on border crossing sales, although they make it as clear as mud to determine what fees they collect for themselves, and recently started to act as a paypal merchant so it is almost impossible to separate the price of the goods and the "international shipping" (plus many of the credit card charges are now for "ebay" rather then being linked to the name of the seller.

 

[cmacd123]

this is not a comment on the new arrangements in the UK. the kicker is that many of the couriers have been know when presented with the requirement to file paperwork, tend to charge (Taxable!) fees to do so, which can often not only exceed the tax,

Speak of the devil! while i was typing I get a notice from DHL I ordered a "part grade" camera from a e-bay seller in Japan. he shipped via DHL, (with COVID regualr mail is not available.) the e-bay sale was C $75.05 including shipping. so the 13% tax should be C$9.76. I jsut got a demand in my inbox from DHL to fork over c$24.00 I don't mind paying taxes, but when someone gets to take away more then the government from me, a payment that will not contribute to making the country a better place, I do get upset, particlularly when I did not get to select the recipient of my forced largese.

 

[MattKing]

now in most of these systems, each step in the chain charges and remits the tax based on the full selling price, but gets a rebate for the tax that they paid on the goods or materials that they purchased. (imagine how complex THAT is for a smaller company, trifling for a big company with massive accounting systems)

Actually, that has turned out to be a great benefit for most business.
Even the most rudimentary of computer book-keeping systems captures this easily. And those systems do a really good job of giving a business owner a really good indication of how their costs relate to sales.
Yes, GST forced a significant portion of the small business world to improve their abilities to record accounting information. Almost all of them are much better off.

 

[Mick Fagan]

I owned a small manufacturing company when Australia introduced their version of the Goods and Services Tax (GST) on the 1/07/2000, which is the start of our financial year.

Collection of the GST in general, requires all businesses to run computing software and to run all sales and incoming raw stock through the software. At the end of the month, day or year, one simply does a summary and instantly you have the tax paid and the tax owed. Now it isn't quite as simple as that, but very close. We never had a problem and even today after 8 years of retirement, we still run the same software for our personal expenses and transfer to a spreadsheet to see where we are at.

Using Ebay as an example, we in Australia have to pay a flat 10% GST on every purchase or service that we involve ourselves with. When purchasing something from outside Australia via Ebay there is an additional transaction added to the bill, which is a 10% GST and it goes into an account held by Ebay and that then is passed on to the federal government and everything is settled. It is simple, works well, and people very soon understood just what is happening and how it is happening.

The international seller doesn't have to worry about anything, the conveyancing company, Ebay in this instance, does everything seamlessly.

Prior to this happening there was a short period where the Australian government insisted individual sellers around the world should register to become Australian government GST collectors; this just didn't happen, just like it would seem the new Brexit rules talked about in this thread will probably not happen.

Mick.

 

[MattKing]

The complaints about the couriers are understood, but the current situation for non-US small shipments merely mirrors the old situation for US shipments prior to the re-negotiation of NAFTA,. That re-negotiation resulted in an increase to the lower limit for duty free importations, which in most cases eliminated the courier brokerage charges. all of which is to say that things can be fixed, and the method to do so is clear, if not politically easy.

 

[mshchem]

Actually, no.
A well designed sales tax (note the emphasis) is the least regressive tax available, because it targets those who can afford more.
So called luxury taxes may be the best taxes, but if the poor are only able to "run to" "booze, smokes, lottery and government sanctioned marijuana", then I'll agree that that will be defeated.
If only they had good food and reasonably priced accommodation to "run to".

Most of the urban poor don't have transportation. In the United States, mass transit is hit or miss. The city I live in has decent bus service, jobs are plentiful, fresh food in season is available, food pantries, good low income housing, especially for older folks.
I go 30 miles north to an area that if you don't have a car it's terrible. More women and children (and dads) are trapped, the supermarkets sell liquor and filthy cigarettes and vape pens it's terrible. And getting a quart of cheap booze, is a bad choice.
Yeah the US doesn't have any good examples of luxury taxes, we tried to tax gas guzzlers, it only applied to cars. So now everyone drives a truck or SUV not covered by the extra tax. I drive a cheap Subaru Crosstrek, 2 L ,flat 4.

I'm for a bonefide wealth tax, and inheritance taxes. Like Bernie Sanders says, the first 50 million is OK. After that the money gives a very few, enormous power.

 

[MattKing]

Up here, almost all normal groceries are tax exempt.
The liquor and cigarettes (and for all I know vaping products) are taxed to the hilt.
Just this year they are starting to add taxes to pop (I believe you refer to it as soda).

 

[foc]

Prior to this happening there was a short period where the Australian government insisted individual sellers around the world should register to become Australian government GST collectors; this just didn't happen, just like it would seem the new Brexit rules talked about in this thread will probably not happen.

I hope the UK HMRC sees sense and follows the Australian example.
For any e-commerce business owner, your number one priority is to make it easy for the customer to make and complete a purchase. Unfortunately, the new Brexit EU - UK rule puts an impediment in the way.
I understand how Adox/FotoImpex are trying to get a workaround for the £135 rule but it makes it unnecessarily complicated-sounding from the customer's point of view.
I have heard of other businesses in the EU that have decided to stop or suspend sales to Great Britain, which is unfortunate from everyone's point of view.

 

[Arcadia4]

All I can see that is a slight improvement on my depressing analysis is that it would appear that from what you have said, is that the U.K. buyer has no declaration to sign. He simply pays the VAT on the total including delivery plus if it is RM a flat handling charge
pentaxuser

Yes, Looking again at your earlier email if you order goods over £135, which Adox will sell you ex VAT, but inclusive of delivery, you will be charged;
- Duty if applicable #
- UK VAT @20% on the total cost
- Handling fee.

However you don't need to make any declaration as such on receiving them, (that is for the seller) you just pay the fee and thats it!

Having got the goods, you are then free if as part of syndicate to sell them privately to the other members.

# There should be no duty to pay for film and such but if for example you also buy a T-shirt with the Adox logo on it (should Mirko decide to sell such an item), textile duty is 12% if the original article was made in SE Asia (unless siginficantly changed in Germany) even if sold by a German seller. VAT is then charged on top of the duty just to rub it in.
One of the only 'positives' (if you like photogear) from Brexit is that most UK external duty rates globally have been abolished, typically 5% on say photographic gear from Japan, (but there never was of course from EU sellers)

One reason why some people have been charged so much is they've bought from an EU store which hasn't changed its website to account for the changes, still been charged German VAT at 19%, then got stung with UK Duty (say on clothes) plus UK VAT plus courier charges on the lot .

In addition to photo gear from fotoimpex, maco and ebayers, I used to import the odd case of Austrian wine, as hard to buy in the uk. This is now pretty complex/expensive, not least excise duty is paid on the total cost after vat, and Austrian rates of VAT on wine from producers were low (12%) , well its essential not a luxury!

If the above is too much hassle the other option, is to buy from a UK retailer that sells Adox items such as Nik and Trick.

 

[ADOX Fotoimpex]

Its worth noting whilst alot of this is due to Brexit, in particular the need to register with hmrc for goods under £135 which applies globally, plus the faff of customs paperwork and handling charges, Some of this is in advance of changes occurring in the eu in july
- Low value consignment relief where goods under £15 or €22 were exempt from Vat was abolished with Brexit in jan, but also comes into force in the EU from July
- The rules over VAT on goods under €150 also change with VAT now applicable based on the buyers country not the seller. However in the eu the seller can also register for vat in a single country.
- marketplaces such as ebay are expected to be responsible for collecting VAT. This has already come into effect with brexit.

Its actually the latter with brexit where the biggest change has occurred. HMRC advise is that vat is not applicable on private sales. However buy goods from ebay from private sellers in the eu (not uk) and you now get charged 20% vat as well, same as for shops on the basis that eBay is the shop.

It is correct that we have to collect 27 different VAT´s starting from July on. I mentioned this earlier. Its a bureaucratic nightmare and no one wins in the sum. However the difference is that we can declare all those 27 small VAT declarations against our local tax authorities and we can use the services of our long standing tax consultant and german law, which I studied, applies. I reprogrammed our business software and by July we can comply upon the pressing of a button. Having to declare and comply for roughly 39 pounds from small order in british VAT monthly through a UK tax conusltant in an unknown jurisdiction with often contradictory rules, however, is prohibitive for any small business.

 

[foc]

If the above is too much hassle the other option, is to buy from a UK retailer that sells Adox items such as Nik and Trick.

Yes, shop local is always good but let it be by choice not imposed. The idea of e-commerce is that the customer can choose where and when they make their purchase.

I wonder could Adox/FotoImpex get a software solution for their website that could calculate the Vat & import charges at checkout (for <= £135) so there are no surprises for the customer?

I recently purchased from Uk (to EU) on ebay and at checkout, I had the Vat and the import charge calculated, so I could decide to proceed or not.
The package arrived with customs declaration etc but no secondary charges.

 

[AgX]

But why did post-Brexit UK not apply the standard procedure applied within EU customs authorities so far on non-EU imports: the custom offices collecting duties and VAT from the buyer?
The buyer then would have extra expenses for doing that payment via COD, but even these cost could be saved by modern technology.

In any case the fiscal processing would be handled by a large authority used to it and not by small foreign businesse. To me it looks like brexiting on the costs of others...

 

[pentaxuser]

If the above is too much hassle the other option, is to buy from a UK retailer that sells Adox items such as Nik and Trick.

Yes, as I said, I fear that currently it will be too much hassle and most buyers see themselves as having two options: The hassle option which will only be sensible if buying direct from Adox reduces the cost to appreciably below what the U.K. retailers will charge for their Adox items

None of the above will have escaped the retailers notice and the astute ones will pitch their prices to make them marginally cheaper or even the same as buying directly from Adox but saving the hassle. The result is that U.K. customers will pay more for the goods that pre-Jan 1 2021 would have been cheaper with no hassle whether it was a purchase from Germany or the U.K.

pentaxuser

 

[ADOX Fotoimpex]

Free trade, market economy and competition are the basis of our wealth. The united market must because of its size function much better then a local british market.
Consumer prices are very likely to increase due to Brexit. If any other benefits (which actually?) compensate partially or even overcompensate for this, we will have to see in the future.
For small orders the customs barrier is a problem and will be in the future. About the 135 UKP rule we have to see. If it becomes possible for example to declare this in an easy way avoiding a tax consultant whos bill outruns the actual tax collected, we might be able to comply again. At present I can see some collueges not being aware of this and not charging any or German VAT on small orders. They will have to repay these plus a punishment fee. There will be a lot of tears rolling in the future about this. especially since we do not even make 20% of gross-profit on most of our assortement (films, papers etc.).

 

[cmacd123]

It is correct that we have to collect 27 different VAT´s starting from July on. I mentioned this earlier. Its a bureaucratic nightmare and no one wins in the sum. However the difference is that we can declare all those 27 small VAT declarations against our local tax authorities and we can use the services of our long standing tax consultant and german law, which I studied, applies..

will this change effect those who want to order from ADOX for shipment to Canada or the USA?

 

[beemermark]

Actually, no.
A well designed sales tax (note the emphasis) is the least regressive tax available, because it targets those who can afford more.
So called luxury taxes may be the best taxes, but if the poor are only able to "run to" "booze, smokes, lottery and government sanctioned marijuana", then I'll agree that that will be defeated.
If only they had good food and reasonably priced accommodation to "run to".

So a progressive tax would target buyers of luxury goods (like cameras & fim) since only those that can afford more have the money. You cannot argue cameras and film are a necessitate. Actually I agree 100%

 

[AgX]

At present I can see some collueges not being aware of this and not charging any or German VAT on small orders. They will have to repay these plus a punishment fee.

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?

 

[Craig75]

This is comprehensive. Even if I might repeat myself just to make sure for our services:

- You are not charged German VAT. Only british VAT is colected upon arrival
- You should not be charged additional services except VAT and if aplicable customs because we use (for this reason) world postal service
- You may have to drive to the post office to make this declaration and pay on location though

We are looking into courier options but they will involve a paperwork fee on top of taxes collected.

It should be vat + customs duties where applicable + collection charge by the courier. Basically vat + administration fees. The administration fee is such a scam but its another cost for the buyer.

 

[Agulliver]

It all seems something of a mess.....and definitely more difficult than the 1980s before the single market was created. That makes no sense at all.

 

[ADOX Fotoimpex]

will this change effect those who want to order from ADOX for shipment to Canada or the USA?

No, not at all. Canada, the US, Switzerland and other countries are a "clean" export. No worries here. The 135 UKP rule is the first attempt I ever heard of from a foreign jurisdiction to imply sales tax collection onto an outside territory. Inside the EU things change. We will be charging individual VAT rates for inside EU commerce from first of July on. We already do this for some EU countries where we reached the respective threshholds. Things have become very complex. It´s a big thing over here and every one selling outside his country is affected. We are a bit better off than some others because I programmed our business software myself (after 25 years of tweaking it has become quite a beast) and can easily implement such changes. But I know of other companies where they are pulling the handheld calculators now and go into night shifts....

 

[AgX]

At present I can see some collueges not being aware of this and not charging any or German VAT on small orders. They will have to repay these plus a punishment fee. There will be a lot of tears rolling in the future about this. especially since we do not even make 20% of gross-profit on most of our assortement (films, papers etc.).

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?

Bumb...