VAT on parcel from USA: postage taxed as well as contents


R

RobertL

I was recently sent a parcel from the USA of goods (bronze statue) I
had bought on eBay. The customs forms were correctly filled out by
the seller.

The HM revenue and customs have changed VAT on the value of the
goods, but also on the postage cost.

Does anyone know what the justification for this is? Presumably it is
not a mistake, but it does seem unreasonable.

Robert
 
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T

Troy Steadman

I was recently sent a parcel from the USA of goods (bronze statue)  I
had bought on eBay.  The customs forms were correctly filled out by
the seller.

The HM revenue and customs have changed VAT on  the value of the
goods, but also on the postage cost.

Does anyone know what the justification for this is?  Presumably it is
not a mistake, but it does seem unreasonable.

Robert
It follows the general principle. If you buy something in the UK which
includes postage or delivery, the postage or delivery element is
VATable at the same rate as the consignment.
 
C

Chris Blunt

I was recently sent a parcel from the USA of goods (bronze statue) I
had bought on eBay. The customs forms were correctly filled out by
the seller.

The HM revenue and customs have changed VAT on the value of the
goods, but also on the postage cost.

Does anyone know what the justification for this is? Presumably it is
not a mistake, but it does seem unreasonable.
I think that's fairly normal. The charges are based on the CIF (Cost,
Insurance & Freight) value of the package when it arrives.

The argument they use is that although the goods may have been worth
their declared value at the point of origin, transporting them to
another location has enhanced their value. Its that enhanced value
that they base their calculations on. Its annoying, I know, but there
is some sense in their logic.

Chris
 
M

Mark Goodge

I think that's fairly normal. The charges are based on the CIF (Cost,
Insurance & Freight) value of the package when it arrives.

The argument they use is that although the goods may have been worth
their declared value at the point of origin, transporting them to
another location has enhanced their value. Its that enhanced value
that they base their calculations on. Its annoying, I know, but there
is some sense in their logic.
It also avoids unfairly overcharging customers who use a vendor that
supplies on an "all in" basis with shipping included in the price, as
against those who bill for it separately. And it avoids scams whereby
shipping costs are artificially inflated so as to reduce the tax
liability on the lower headline value of the actual item.

Mark
 
D

Derek Geldard

It follows the general principle. If you buy something in the UK which
includes postage or delivery, the postage or delivery element is
VATable at the same rate as the consignment.
Basically they take the (almost justifyable) view that cost of
shipping is part of the cost of the product.

However, what's more, if import tax/duty is due they charge VAT on the
import duty as well.

IE even the tax itself is taxed again, this is definitely regarded as
"Umpty" hereabouts. :(

Derek
 
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R

RobertL

It also avoids unfairly overcharging customers who use a vendor that
supplies on an "all in" basis with shipping included in the price, as
against those who bill for it separately. And it avoids scams whereby
shipping costs are artificially inflated so as to reduce the tax
liability on the lower headline value of the actual item.

This is interesting. I can see the logic in some ways.

thank you for your help folks,

Robert
 
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