Ducking the UK VAT

My customers are angry....

[tolachi]

Does anyone know of a way around the UK VAT shipping from the US? A fair number of our UK customers are a little miffed to discover that they need to pay an extra20 pounds to actually get their order. Our average order runs about $180 to $500. We usually ship usps.

Any advice is greatly appreciated.

Pete

[PCInk]

Well, of course it's entirely your decision on what you do. But if you ship commercial goods and customs get them and tax is not paid on them, I very much doubt they will send them back to you. You will likely lose the goods. And a customer can always request a credit card chargeback if you have not informed them of the true cost of the goods.

It just seems like to much of a risk to me.

[wackal]

I have never had one customer complain to me if they are charged VAT because they know that it is not me that charges it but the UK government. Most customers are in fact VERY HAPPY if you can get an order to them without them having to pay the VAT. That is the reason why they shop from US websites, because VAT is so expensive that even with a currency conversion and the extra costs for shipping, the order still comes out to less than what they would pay if they ordered from a UK shop.

The only people who seem to be complaining about VAT are the UK business owners. I love VAT myself because it gives me a great competitive advantage!

[RedWolf]

Actually wackal, if you are purchasing goods from out of state to avoid your states sales taxes, you better check your states tax laws. More than likely you are supposed to be claiming a Use Tax on either your state income tax return or on a seperate form. If your business is set up to collect Sales tax from customers in your own state (it better be unless you only wholesale) then there is probably a place on the sales tax form to fill in your use tax. Not doing this is tax evasion. Most people get away with it because it is too much of a hastle for the states to audit them on it, but it would be much easier to do for businesses since you supposedly have records of all your purchases for Federal and possibly state income taxes.

[Philip_M]

"As for getting around the VAT, try listing your items as gifts on the customs forms. You also may want to underestimate the value of the goods."

Customs and Excise are not completely stupid, you know. If they catch you they will confiscate the goods, charge the customer a penalty, possibly bring a prosecution, and enter your name on a blacklist. The chance of interception may not be very high, but as with most crimes the penalties if you are caught are eye-watering. The more the shipments to the UK the greater the chance of a random check being carried out.

I have the same problem with export shipments to Australia. Australia import duties and taxes are quite high, and my customers sometimes ask that we should under-declare the value, or call ita "gift". We always decline to do this. If Australian customs once open up a parcel from my firm and find the value mis-declared, then you can bet that every parcel in future with our label on will be ripped to pieces. And who wants to deal with a self-proclaimed dishonest merchant?

In any case, we must declare the true value on the outbound customs declaration so we can use the form to recover the UK VAT content, and have this certified by the Post Office. So UK exports cannot be fiddled.

Having said that, there appear to be no import duties or taxes on entry into the USA or Canada, at least for lower value packages.

[PCInk]

>>> Customs and Excise are not completely stupid, you know.

Completely agreed.

There is something else that I haven't mentioned. It is the amount of parcels and strictness of Customs and Excise. And this is related to the United States of America.

September 11.

Because of the above date, and because of the UK being a high terror threat (probably a lot higher than the US), I would guess Customs check a lot more suspect packages than we think. They would not look very good if we suddenly had illegal arms or terrorism tools coming into our country. About five or six years ago the Royal Mail in our area went onto 'orange alert' and many packages were checked due to terror intelligence information. It would not suprise me if Customs have upped their standards and their checks.

[jacuzzi]

Only way around the VAT on imports is to misrepresent the value and type of the goods on the customs declaration. Some types of product - such as food and books are VAT exempt. From what I hear around 70% - 90% of the products get through... but you are in for a rocky ride if the package is opened.

[wackal]

not to get back into a whole debate on the merits of VAT, but why is everyone making it seem like the entire EU will come down on anyone who dares try to avoid the VAT?

what if I lowballed the order and they found out. They come back to me and I say it was a clerical error. Can anybody prove it wasn't? Like I said before, they'll charge the VAT and let the package thru. It's a win-win either way.