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Shipping - VAT & Duty


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#1 Afton Grant

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Posted 10 October 2005 - 11:03 PM

I just shipped my old Glidecam package from here in New Hampshire, US to a buyer in the UK. Charged it to my Fedex account, about $350. Was told there may be a VAT and Duty charge added to it. I figured if that's what had to be done, so be it. I just checked my account online and was a wee bit surprised when the VAT and Duty charges were a combined $740 - yes, on TOP of the already charged $350 shipping charge.

Now, I'm not a frequent shipper of goods overseas, but this seems a wee bit extreme, does it not?

I'm on the verge of going postal here.

AH HA HA HAAAA!!!!! GET IT!! It was a pun!!! .....because I said postal..... and I was talking about shipping...... ha ah ugh. I'm screwed.

Peace,
Afton
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#2 Nils Ruinet

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Posted 11 October 2005 - 04:29 AM

There is a point I don't get : is there VAT on second hand sales ?
:blink:

I thought it was just for new stuff...
Or is it different when you ship it to another country ?

:(

Does anybody know more about that ?

Nils.
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#3 Chip Monk

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Posted 11 October 2005 - 06:36 AM

I just shipped my old Glidecam package from here in New Hampshire, US to a buyer in the UK. Charged it to my Fedex account, about $350. Was told there may be a VAT and Duty charge added to it. I figured if that's what had to be done, so be it. I just checked my account online and was a wee bit surprised when the VAT and Duty charges were a combined $740 - yes, on TOP of the already charged $350 shipping charge.

Now, I'm not a frequent shipper of goods overseas, but this seems a wee bit extreme, does it not?

I'm on the verge of going postal here.

AH HA HA HAAAA!!!!! GET IT!! It was a pun!!! .....because I said postal..... and I was talking about shipping...... ha ah ugh. I'm screwed.

Peace,
Afton


I shipped my 3A Sled to the UK when I bought my current rig, and the charge was around $160, nothing additional. I know I shipped with some kind of tracking number, be it Fedex or UPS, but can't remember which. I think that also had insurance on it. Actually, it may not have. If you quote the value, that's what they may tax you on. If you're sending as a gift, they may not tax. Few years back, can't remember....losing brain power.....need more coffee.

Take Care,
Chip
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#4 Jason Torbitt

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Posted 11 October 2005 - 11:28 AM

I think VAT or duty is not applied to items which are described as 'gifts' on the packaging label. however I'm sure there's a price limit on this depending on the value of the item being shipped.

Not certain...
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#5 Afton Grant

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Posted 11 October 2005 - 12:36 PM

I called FedEx this morning to stand up for myself a bit. VAT and Duty taxes are assessed by the country themselves, not FedEx. Somehow, the country determines what the tax should be based upon its declared value and who knows what else. FedEx told me that it can be UP TO 100%! How can this be possible?

When the package arrives in the country, the country assesses the tax and FedEx pays it, which is later billed back to your account. I told the billing rep, the associate at the Fedex location that helped me pack and ship the item told me of the Duty and VAT taxes. When I asked for an explanation as to what the taxes were and how much they might be, the associate had no answer. Figuring the tax might be 5-8%, I went ahead with the shipment. Had I any idea the tax was going to be REMOTELY close to $740, I never would've shipped it.

Literally, I could fly there, deliver it in person, stay for a couple nights, and fly home for less than the $1100 it ended up being (when you include the original $350 to ship). Anyway, explaining that point, as well as my just basic frustration with the original associate that helped me ship the item for not warning me of this potential fee, I negotiated the final tax cost down to $200.

I understand completely that Fedex does not know or have control over the taxes a country chooses to apply. However, being Federal Express, I would assume they are somewhat familiar with shipping procedures and could at least warn a customer that it MIGHT be somewhat high.

And by the way, I'm sure I'm ignorant in the ways of taxation and importing/exporting, but I hardly consider $740 on a $2000 item a tax - unless you're dealing with the mafia..... which doesn't exist, remember.

Peace,
Afton
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#6 Jason Williams

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Posted 11 October 2005 - 02:52 PM

Welcome to the wonderful country that is the UK .... screw you over for tax, then screw you over again and again, until you can just about afford to live .... well that's me anyway :)

I had my original Basson imported from Argentina, and that was around £2200 when I bought it, and when it was imported, I was charged £700 to get it into the country! I've never questioned it as I was so shocked, but I'm really careful what I buy now - more recently I bought a £100 transmitter from the USA and was charged £30 by FedEx for the privilidge of bringing it into the UK.

But I shouldn't complain .... petrol has gone down in price to nearly £1 a litre - thanks Tony!!! :ph34r:
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#7 Afton Grant

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Posted 11 October 2005 - 03:22 PM

The whole system just seems odd to me. I was told there MIGHT be a tax when it arrives. Ok. But as a consumer, don't I have the right to know what that amount might be before I am billed so that I can make the choice whether or not to go through with the transaction? Isn't that the way the economy works? Aren't there laws protecting against something like this?

There is no other business I can think of where you go in for a service, and are told, "We'll do it for you, but we don't know how much it's going to cost. It could be $0, it could be $2000. If you'll just give us your account number and we'll fill in the amount when it's done."

Lesson strongly learned,
Afton
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#8 Jamie Hammond

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Posted 11 October 2005 - 05:32 PM

Hi Afton,
The whole import duty thing is a slightly shady area, and paying almost half your sale in tax is horrendous.Although surely the buyer should have paid this? Anyway, I looked into buying a provid 3 years ago from a guy in New York, I spoke to him nearly a dozen times working out which way was the best way to do business. But it was the import tax issues that worried me the most. I spoke to a contact at BBC shipping who informed me of a couple of ways of getting round the whole import duty crap. 1 was declare that it is a gift and therefore no duty is charged (as the rig is used), the only problem is the insurance as they would possibly become suspicious if you insured the delivery for $2000 and it was a gift, so insurance was a no no. or 2. quote this magic shipping number on the box. I don't remember the number now but what I do remember is that duties are based on what is actually shipped, so a bag of apples say could be 2% were as a video camera could be 45%. To make matters even more confusing there are a number of different categories under film and tv. This is where the magic shipping number came in. The number quoted was for the tv industries lowest charged duty item, as I said this was 3 years ago and hence photographic memory has dwindled since then but Im sure it was only about 5%. I would have thought fedex would have a book of shipping and import duty taxes, that they could have at least referenced for you. My only suggestion is to check which tax bracket the rig was charged into the country under and try and prove that it is actually a lower rated item. Sorry couldn't be of anymore help

Good Luck

J
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#9 Brad Grimmett

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Posted 12 October 2005 - 03:38 AM

Afton,
Did you ever see a receipt for the taxes? Surely FedEx would show you a receipt to prove that they ACTUALLY paid what they said they paid. I don't think they would give you a break in the price if they really paid $740. It just doesn't make sense. I had a similar situation with UPS a few years ago when I bought a motor from Heden. When I questioned it they threatened to try to ruin my credit if I didn't pay. That was the last time I will ever ship with UPS. Of course I was never able to get a receipt, but I paid out of fear of having a credit problem. Sure sounds like a scam to me.
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#10 RobinThwaites

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Posted 12 October 2005 - 04:55 AM

Hi All

Taxes bringing gear into the UK are approximately 6% duty (depending on the item and the tarriff it attracts, consumer items could be much more) and the 17.5% VAT. All of Europe applies these rates although percentages can vary from country to country. Duty is usually more in southern Europe and VAT can vary between 15 and 25 percent.


VAT stands for Value Added Tax which means that anything supplied commercially has it applied as that percentage of the value of the goods. Because FedEx, UPS etc. always assume that it is a commercial transaction they apply VAT to everything - a better plan may be to use a freight agent and ship as personal effects. The key thing is that the buyer pays the VAT and then reclaims it if he is able.

Person to person second hand sales within Europe do not attract VAT unless the seller is already VAT registered (if they are making any money they should be anyway). If the buyer and seller are VAT registered the buyer can reclaim the VAT provided that he has the sellers registration number.
All sounds very complex, just our governments way of getting the general publice to collect taxes on their behalf.

The trick is to talk to the shipper first, if you get into problems these things are virtually impossible to undo.

Robin Thwaites
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#11 BRIANBUSBY

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Posted 13 October 2005 - 03:44 AM

robin
most people at that time of night are in bed !!
i,m impressed you can get your head around import taxes
or is it as good as a bed time story.
british tax laws zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

brian
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#12 Richard James Lewis

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Posted 13 October 2005 - 11:23 AM

robin
most people at that time of night are in bed !!
i,m impressed you can get your head around import taxes
or is it as good as a bed time story.
british tax laws zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

brian


10.55 AM GMT :P
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#13 benedictspence

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Posted 13 October 2005 - 12:48 PM

Hey Kids!

I was stung for UKP800 when I shipped my Klassen Vest into the UK... I had to pay it or I couldn't collect my goods. Unless I'm very much mistaken Afton- this is a charge that the buyer should pay (sorry whoever you are mate!). VAT is payed by the buyer not the seller- even if it is direct to the government.

Do let me know if you decide to pay it Afton and I'll send my VAT bill over to Klassen! (not really)

Ben Spence
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#14 Afton Grant

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Posted 13 October 2005 - 01:47 PM

Hey Kids!

I was stung for UKP800 when I shipped my Klassen Vest into the UK... I had to pay it or I couldn't collect my goods. Unless I'm very much mistaken Afton- this is a charge that the buyer should pay (sorry whoever you are mate!). VAT is payed by the buyer not the seller- even if it is direct to the government.

Do let me know if you decide to pay it Afton and I'll send my VAT bill over to Klassen! (not really)

Ben Spence


Ben,

I was not familiar in the least bit with the taxes upon shipping. The buyer did not inform me of them. The Fedex associate let me know there may be a tax, but certainly did not let me know it could possibly be $740. Since I had already quoted the buyer the shipping cost of $350 and he had paid me in a timely manner, I decided upon shipping to just pick up the taxes - thinking they were going to be perhaps $50 at most.

The package was delivered and a couple weeks later, I find out about this charge. Had I known about it before hand, yes, I would've charged the buyer or shipped it a different way. But I didn't. I suppose that's my mistake. I'm not going to go after him now and ask him to put up more money. I was somewhat relieved when I was able to convince Fedex to drop the charge down to $200. I was most upset with the Fedex associate that couldn't tell me a darn thing about the taxes or what they could possibly be.

A little bit older and wiser,
Afton
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#15 joe mcnally

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Posted 14 October 2005 - 06:31 PM

Hi Afton
you sound like a very honourable person.
One or two thoughts
Is your UK buyer VAT registered. If yes then ask them to reclaim the VAT for you this would be very easy.
If no then contact the UK VAT office and ask for a refund you are not liable for this charge, worth a quick letter I would say.
Assuming you are in business in some way then all the shipping costs attract tax relief for you so may not be such a worry.
Alternatively as you say just put it down to experience but it is not the way transactions should happen UK to USA, it is exceptional.
I have just purchased quite a large ammount of equipment from B and H Phot NY and if its any consolation it has been a complete nightmare.
A year or two ago these transactions were fairly simple and cost effective.
Maybe parnoia but I feel the tax authorities of both nations want to discourage trade between each other.
Also Fed Ex, DHL seeem to delight in stacking up the fees and yes seem very unhelpful for companies that do this type of thing day in day out.
Hope this is helpful and not confusing
Joe
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