Discussions on Importing from HK resellers

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braddersmd

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**discussion split out from sales forum**

Julia, can i ask for clarification regarding import duty and VAT. Your website mentions that in the event of duty and VAT needing to be paid, you will cover the costs.

As all imports of camera equipment (especially lenses and bodies) are not duty exempt in the UK, how do you process the shipping paperwork? Do you declare items at full commercial value, or as a gift?

Or, to look at this another way, do you put the onus on the buyer to make an import declaration - and if they don't, but "get caught", do you cover all associated costs?
 
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braddersmd said:
Julia, can i ask for clarification regarding import duty and VAT. Your website mentions that in the event of duty and VAT needing to be paid, you will cover the costs.

As all imports of camera equipment (especially lenses and bodies) are not duty exempt in the UK, how do you process the shipping paperwork? Do you declare items at full commercial value, or as a gift?

Or, to look at this another way, do you put the onus on the buyer to make an import declaration - and if they don't, but "get caught", do you cover all associated costs?
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The products are declared at commercial value, not declaring as gifts. There are times that Custom would value items at a higher value than our actual selling price, and it could be due to the fact that our import goods are selling lower than the local UK prices. Whenever the Custom requires a higher VAT than the amount already paid, we would cover that cost.

Therefore, the actual cost you are paying is the all inclusive amount at checkout on our website regardless of additional VAT needed to be paid because we will pay for it.
 
Julia,

Just to clarify further - how are you, the exporter, paying UK local duty and VAT (based on your commercial value), in advance of the arrival of the goods into the UK?

I have been importing items for 15 years from Asia, and I have never seen an advance payment by a supplier of VAT and duty - it intrigues me, and if you can explain it, I may suggest it to my suppliers that they could also use this method.

I currently import from Taiwan, S.Korea, China (Shenzhen, Guangzhou, Xiamen and Tianjin), along with Hong Kong for combination shipments.

To import goods into the UK, I currently use a duty and VAT deferment account - the import agent handles the submission to the UK authorities, and we pay on account from the UK.

I have never know an import to be declared to be too cheap against local pricing. As long as the price paid is genuine, and can be proven, this would not happen. For example, I buy goods for sale here in the UK (and Europe). Obviously I do this to make a profit. This means that all the goods I sell are more expensive in the UK local market than the price I pay the supplier. If I pay, for example, 100usd for an item in HK, and the local pricing (HK) is reasonable and not radically different than other items available in the local market, UK customs would not after inspection, have an issue.

If you can clarify this, it will make it more simple to sell into the UK market from HK, and also may help other importers like me to do similar pre-pay on duty and VAT for their customers.

Thanks, Mark
 
braddersmd said:
Julia,

Just to clarify further - how are you, the exporter, paying UK local duty and VAT (based on your commercial value), in advance of the arrival of the goods into the UK?

I have been importing items for 15 years from Asia, and I have never seen an advance payment by a supplier of VAT and duty - it intrigues me, and if you can explain it, I may suggest it to my suppliers that they could also use this method.

I currently import from Taiwan, S.Korea, China (Shenzhen, Guangzhou, Xiamen and Tianjin), along with Hong Kong for combination shipments.

To import goods into the UK, I currently use a duty and VAT deferment account - the import agent handles the submission to the UK authorities, and we pay on account from the UK.

I have never know an import to be declared to be too cheap against local pricing. As long as the price paid is genuine, and can be proven, this would not happen. For example, I buy goods for sale here in the UK (and Europe). Obviously I do this to make a profit. This means that all the goods I sell are more expensive in the UK local market than the price I pay the supplier. If I pay, for example, 100usd for an item in HK, and the local pricing (HK) is reasonable and not radically different than other items available in the local market, UK customs would not after inspection, have an issue.

If you can clarify this, it will make it more simple to sell into the UK market from HK, and also may help other importers like me to do similar pre-pay on duty and VAT for their customers.

Thanks, Mark
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When I bought from them and paid VAT to the delivering courier (price was still better than UK).

I emailed them a scanned copy of the duty/VAT receipt and they paid it back, straight into my bank within 24 hours.
 
PsiFox said:
When I bought from them and paid VAT to the delivering courier (price was still better than UK).

I emailed them a scanned copy of the duty/VAT receipt and they paid it back, straight into my bank within 24 hours.
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Mark, that appears to correlate with my expectations. Can you confirm whether you paid duty on the import? If so, to whom did you pay the duty?

Do you mind me asking who the delivering courier was?
 
I have also bought several high value items from DigitalRev.

I got caught for duty and vat about 50% of the time. Scanned the receipt and emailed to DigitalRev. Refunded within a few hours, never more than 24hrs.

Cannot fault them in any way.
 
braddersmd said:
Mark, that appears to correlate with my expectations. Can you confirm whether you paid duty on the import? If so, to whom did you pay the duty?

Do you mind me asking who the delivering courier was?
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I paid duty but it was not for the amount I expected, it was much less. Lucky I guess.

If I remember rightly courier was DHL and I paid them. (might have been fed ex)
 
Apologies to those that think this should be for a private discussion - I think that it is more for clarity and of interest to all that may be thinking of buying grey, so to speak. Maybe it should be in the general forum perhaps..?

So, the concensus - DigitalRev are very honourable, and will refund any customer who is "caught" for duty and VAT. They do this by loading the cost price of the items with an amount of money to cover the charges - they call this an "Import Handling Surcharge".

The Import Handling Surcharge is raised, according to the website as follows :
"Note: We calculate Import Handling based on many factors, such as the base price of the order, the shipping costs, couriers' rates and country of delivery."

Upon receipt of the goods, as gratefully pointed out by hypnotic above, DigitalRev will refund any charges to those caught, and for those not caught, all is well - the customer doesn't lose out, and DigitalRev have increased revenue (using hypnotic's example, 50% of the time)...... At least that appears to be the position.

So, we as customers, all win, eh? The only losers appear to be HMRC....

For completeness, checking duty rates and tariff codes, the following applies to cameras and lenses...

Camera Bodies... Import Tariff : 8525803000 - duty exempt (I was wrong on that bit).
Lenses... Import Tariff : 9002110090 - duty at 6.7% should apply.
Accessories... Various Tariff Headings, common rate - duty at 4.9% should apply.
All of the above are subject to input VAT at the prevailing rate - currently 17.5%.

The above information is accurate to my knowledge, having been provided by our company import freight agents this morning.

I do not, for one minute, believe that DigitalRev are culpable in law in any way - the onus is not on them to declare any import items for either duty or VAT. The onus is actually on the customers to do this. In fact, DigitalRev appear to be covering the risk of each sale by increasing the selling price for all customers (caught or otherwise).
 
Thanks Braddersmd i have often considered purchasing from abroad and in particular Digitalrev and until now it has always seemed a bit should i/shouldn't i but with this thread being open as it is has cleared things up for myself and others i guess so thankyou for that.
 
braddersmd said:
So, we as customers, all win, eh? The only losers appear to be HMRC....




I do not, for one minute, believe that DigitalRev are culpable in law in any way - the onus is not on them to declare any import items for either duty or VAT. The onus is actually on the customers to do this. In fact, DigitalRev appear to be covering the risk of each sale by increasing the selling price for all customers (caught or otherwise).
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Perhaps.... however, if HMRC do their job correctly they wouldn't be losers :shrug:
 
Splog said:
Perhaps.... however, if HMRC do their job correctly they wouldn't be losers :shrug:
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Hmm, you could look at it that way. Unfortunately, the law doesn't agree - it puts he onus on the importer to get it right. It has actually never been the job of HMRC to check every import - that would be logistically impossible. As with all things law related, ignorance of the law is not an adequate excuse.

As a one off, or very infrequent importer, you would likely get little more than a tax demand when caught. Get caught too frequently, or in the middle of a crackdown, and it will be much more than paying what should have been declared originally at stake. especially of you have a track record at this...

On another more positive note, it should be recognised a slight benefit to the system in buying a body as a kit with lenses. If it can be proven that the primary product is the body, then the whole kit is treated at the duty rate of the body, and under the same tariff heading.
 
braddersmd said:
Hmm, you could look at it that way. Unfortunately, the law doesn't agree - it puts he onus on the importer to get it right. It has actually never been the job of HMRC to check every import - that would be logistically impossible. As with all things law related, ignorance of the law is not an adequate excuse.

As a one off, or very infrequent importer, you would likely get little more than a tax demand when caught. Get caught too frequently, or in the middle of a crackdown, and it will be much more than paying what should have been declared originally at stake. especially of you have a track record at this...

On another more positive note, it should be recognised a slight benefit to the system in buying a body as a kit with lenses. If it can be proven that the primary product is the body, then the whole kit is treated at the duty rate of the body, and under the same tariff heading.
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Not disagreeing with what you say Mark ... Except that if I can avoid paying any form of tax I will!
 
With you all the way on that Steve, but here is a major difference between avoiding and evading. One is legal, and one is not.

Now the thread has been moved, and not linked to the sales forum, it is worth noting that its not just HMRC that lose out. For every imported saving, there is a UK retailer who has also lost. The counter argument to this is usually that a UK sale would otherwise not happen, but it usually does not hold water. Generally a delayed purchase is the only result of a slightly higher price.

Sometimes the reality is that lower prices can be had here by looking around. RGB are advertising the D7000 at £949 today for advance orders. It will come with a full UK Nikon backed warranty. An HK company may offer the same item landed at £969.

If you are happy to import, then look more closely at the real cost prices - the SRP in HK of the D7000 is 10450HKD, or £836 in Queens at today's rate. Add shipping at £40 quoted by Fedex today for a 1-off shipment, and you get some idea how much you could really save - if you take the same risk yourself, and don't get caught. If you do, then add The VAT and you're only a tenner or so worse off for taking the chance.

Incidentally, the street price was expected to be 9750HKD as told a couple of weeks ago when I was last there.

Regardless of all that - I actually agree with you that a saving is a saving, so worth having. Sometimes it has hidden costs though.

Would you rather pay without the added burden of the Import Handling Charge, and be better off yourself if not caught? An even bigger saving....
 
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Indeed! ..... I have to wonder about UK retailers though when I can perfectly legally import a Canon 1D MK1V for £3000 yet the lowest price I can find in the UK is £400 more than that! ... Quite a saving in anyone's book I would have thought :thinking:
 
Another thought - there is a good reason Nikon UK are so particular about their warranties - to protect their UK distributors.

Don't forget that HK does not have VAT. Further, duty rates are Europe wide. Even Nikon UK must import to distribute their own products. So the £836 price in HK, even sea freight by the container load, would still end up costing somewhere in the region of £985 at cost price, including the VAT. As pointed out above, the D7000 is already being discounted lower in the UK.
 
Splog said:
Indeed! ..... I have to wonder about UK retailers though when I can perfectly legally import a Canon 1D MK1V for £3000 yet the lowest price I can find in the UK is £400 more than that! ... Quite a saving in anyone's book I would have thought :thinking:
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Obviously, I've no reference to the real true cost price of this item, but you could find that it isn't the UK retailer bumping the price up by £400 - it could well be the pricing strategy of Canon in our market.

Using my much researched D7000 as an example to illustrate this - in the USA it has an SRP of 1199USD. Here the SRP is £1099. Some disparity here given that both markets have to import them from source, so cost to warehouse will be roughly the same. These figures from today's DPreview full review. So it's not always the retailers at fault here...
 
regional contracts are likely the reason. Nikon UK might be a standalone company, much like the way Sony splits its divisions.
 
matty said:
regional contracts are likely the reason. Nikon UK might be a standalone company, much like the way Sony splits its divisions.
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I agree ... to a point! Nikon UK may be an independent operating company? but it will still be owned by Nikon or whatever the holding company is called? .. My point is that inter company selling really is a bit of a smokescreen to profiteering within a marketplace! ... i.e. whatever the operating companies achieve (or lose) the pennies still stay in the same pocket....... Just business at the end of the day, but I don't like it!
 
The rights and wrongs of companies profiteering could take a long time to discuss, and I am more than happy to do so.

More important here, however, is the extremely misleading statement on a website that started my original question for clarification. There is a clear claim that a surcharge is loaded to every shipment to cover any excess charges that "may arise". The reason for potential charges arising that is given is totally bogus. In actual fact, charges on import should ALWAYS arise. Further - why not simply state to all customers, that the onus is on the customer to declare accurately, and not levy the surcharge? After all, if all transactions should carry import costs, why not let the customer take a known risk?

I think buyers should be more aware of the potential dangers of importing themselves - especially if they wish to attempt to defraud HMRC in the process.

Let me paint a scenario - In the space of a year, you import buy 4 items. You begin by discussing the merits of import buying on a public forum, for all to see. You contact a forum sponsor openly for better pricing. You strike up a relationship with that supplier both publicly and privately. You place your first order.

In the year, you have bought 4 items - all of which you have later publicly sold on, 3 on TP sales forums, and one on eBay. All sold for a profit, because you made great savings by importing. In all cases, you did not get "caught".

You attempt a 5th import, and get caught. HMRC are operating a clampdown at this time. They do cursory investigations, like trawling the very public sponsors forum on here - and see you showing interest. This sparks more vigourous investigation. At the end, they judge that you are importing to make profit, by defrauding HMRC. All factually accurate, and you do not have recourse.
 
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Splog said:
I agree ... to a point! Nikon UK may be an independent operating company? but it will still be owned by Nikon or whatever the holding company is called? .. My point is that inter company selling really is a bit of a smokescreen to profiteering within a marketplace! ... i.e. whatever the operating companies achieve (or lose) the pennies still stay in the same pocket....... Just business at the end of the day, but I don't like it!
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it happens everywhere. If you look at most companies, there is a parent company operating, especially for global entities. Regional divisions operate by buying from central area, importing from other regions will be contractually controlled, hence why warrenties might not be favoured, this allows 'market specific pricing'
 
I'm jumping back in here again with another thought for potential importers.

When you import products, you pay duty and VAT at entry on the total cost of the items. Sounds logical, I guess.

So, say an item costs you £100, and it's duty rate is 5% for argument sake, along with VAT at the prevailing rate, 17.5% at present.
On clearance, you should be due to pay a further charge of £23.38 to HMRC for the privilige.

If an importer adds an Import Handling Surcharge to the item, and invoices this higher amount, you pay duty and VAT on the surcharge aswell.

So, £100 item, with a £20 surcharge, means £28.05 becomes payable to HMRC.

OK, I hear you cry - but the importer has agreed to cover all costs if I get "caught". A valid counter point - as long as they agree to also cover any penalties that may arise. If they only say they will cover the tax/duty, local carriage charges and local customs clearance fees, then I expect penalties fall outside.

A quick look at the HMRC website reveals CCEP's come into play (customs civil evasion penalties). Simply put, they look at your case, and decide whether a penalty should apply. If deemed deliberate, then this will be between 30% and 100% of the lost HMRC revenue.

So, again, using the above figures...

The £100 item you are buying, invoiced at £120 to protect you, now costs you up to £176.10 - of which you should get back £28.05 from the selling company. So, it actually costs you £148.05. Still a bargain??

Take this one step further, in the example I posted in #19, and you get caught on your 5th import - and get clobbered for back duty and VAT and penalties on all items, you would have paid....

£120 (£100 cost + Import Handling Surcharge) x 5 items = £600.
Back duty and VAT of £140.25
Penalties up to £140.25

You can claim back the duty and vat charges on the last item (but can you backdate the other reclaims??), so you get back £28.05.

You have effectively bought 4 items at £480 total, and the final one for £372.45. An individual cost of £170.49 each.

This importing game could turn into a very tricky business indeed....
 
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Matty, am I allowed to ask the supplier in the public forum whether they do cover the penalties as well as duty and VAT charges, should they arise, and how far back they will allow a reclaim?

If they do cover both aspects, then the decision to import becomes a whole lot more easy to take.
 
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im not sure i really get the point. when the goods come into the country, you may or may not get a bill, shipping companies sometimes do this, if that happens, you get the bill. my understanding is then that the companies will reimburse. I say companies, because there are a few that do it. Its not just camera gear, there are companies all over the world that will send you whatever you buy. for some reason, DR is being singled out for this, perhaps you should look at other shops, including Play, 7dayshop, DR, Onestop, BHP..the list goes on and on
 
matty said:
im not sure i really get the point. when the goods come into the country, you may or may not get a bill, shipping companies sometimes do this, if that happens, you get the bill. my understanding is then that the companies will reimburse. I say companies, because there are a few that do it. Its not just camera gear, there are companies all over the world that will send you whatever you buy. for some reason, DR is being singled out for this, perhaps you should look at other shops, including Play, 7dayshop, DR, Onestop, BHP..the list goes on and on
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Matt, not singled out as such, although I can see why it could appear that way. DR are the only company you mention who has a Sponsor Forum on TP. This started by me asking them, in their forum, to clarify their terms of trade. The post was moved twice, and now looks like a singling out. If other companies had their own forum, I would ask them directly, if their terms appeared to look incomplete. I asked openly, as i thought others may be interested I the clarification - you seemed to think it should be a private question - for reasons I am not sure.

I asked you above whether I could ask again for further clarification in their public forum, as last time I asked them directly, you moved the post.

I have simply pointed out to all potential buyers, things that are not covered on the DR declaration about importing. It is not a case of sometimes you pay (get caught as per another poster) and sometimes you don't. There is actually a legal requirement on the importer (you, me and anyone else who imports) to declare the import for VAT and duty. It is not the responsibility of the seller, nor the freight/shipping company to make this declaration.

If you do not declare, and the courier does not charge you, you could get hit by a charge from HMRC, of the missing VAT and duty, and also a penalty. As DR make an additional charge at time of purchase, but their website does not mention whether they will also reimburse penalty charges, there is stil a sense of incomplete information.
 
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DR and Onestop both advertise here, but they also both use ebay and a hundred other sites. Why dont you PM DR, they will answer your question, or, if you feel that strongly, perhaps you should also get on to ebay and the countless other sites that carry adverts from these companies.

my understanding is that the shipping company fill in the required C88 or whatever form and if any duty is required, you get the bill. There isnt a little dingy off the coast of france that silently paddles over at night, with a shadowy figure waiting by an unmarked transit van to take the goods to peoples houses, it all goes through TNT, UPS or DHL, they have central hubs where packages are processed, and not released until customs have approved, you either get hit for the duty or you dont, depending on what you buy and its value.

I put the thread in Talk Equipment, someone else moved it to this area.
 
The Tax Man said:
3.4 Prepayment of import VAT on goods purchased over the Internet

UK Customs has special arrangements that allow some overseas traders to charge, collect and pay over to us the import VAT for goods purchased on the Internet that would normally be chargeable at the time the goods are imported. These arrangements operate under Memoranda of Understanding (MoU) signed with certain overseas customs and postal authorities. The countries that have an MoU with HMRC are: Channel Islands, Hong Kong, Singapore and New Zealand. Overseas traders wanting to use this procedure must be authorised to do so by their authorities.
Once authorised, foreign businesses are issued with a unique authorisation number, which they must show on the customs declaration or packaging. Also they will include the statement 'Import VAT Prepaid'.
Where these arrangements are used you will not be charged a Royal Mail handling fee when you receive your package.
If you are a VAT registered business and purchase goods for use in your business you should keep the outer wrapper and invoice from the supplier to support your claim to input tax.
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perhaps they operate under this?
 
matty said:
perhaps they operate under this?
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Indeed they could, and if they did, it would be simple to clarify and state this openly on the website. The fact that couriers deliver and sometimes charge VAT which has to be reclaimed, tends to indicate that they don't - again, all that is required is clarification.

I will ignore the dingy and shadowy figure comments, as i find them rather condescending thanks. I have already explained that i import from Asia for a living. I am fully aware of how the process works.

All I asked directly of the company, in the open forum they advertise on here was for clarification. Nothing more. My post was then moved, as you deemed it should be elsewhere. I then added more general factual information after the move. I do not have a problem with anyone buying and importing. I have added factual information about the process that will hopefully help all.

Matt, I appear to have caused you unrest, but don't know why. Suggesting I should also email eBay and the like - why? Someone posted on here. I asked for clarification on here. Where's the problem? Why do you think it should be for PM - others have already indicated it is of interest to them.
 
Why should there be a seperate agenda? Now that has really confused me? Would you please kindly elaborate? I do not work in the digital camera industry, and have no ties with any camera vendor, UK or otherwise.

I have bought imported products before, like Play for example, for DVD's where they do pre-pay VAT, and duty is exempt. I have also bought from Kerso (a Canon S95), and was very happy with his service also.

I have openly acknowledged every positive comment about DR's service - why would I not? Their service is not in question by me. I've not used them yet, but would be prepared to following clarification - it's a damn site easier ordering for delivery than lugging gear half way round the world myself.

I am actually finding the defensive posts quite puzzling indeed.
 
DigitalRevDeals said:
The products are declared at commercial value, not declaring as gifts. There are times that Custom would value items at a higher value than our actual selling price, and it could be due to the fact that our import goods are selling lower than the local UK prices. Whenever the Custom requires a higher VAT than the amount already paid, we would cover that cost.

Therefore, the actual cost you are paying is the all inclusive amount at checkout on our website regardless of additional VAT needed to be paid because we will pay for it.
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braddersmd said:
Indeed they could, and if they did, it would be simple to clarify and state this openly on the website. The fact that couriers deliver and sometimes charge VAT which has to be reclaimed, tends to indicate that they don't - again, all that is required is clarification.

I will ignore the dingy and shadowy figure comments, as i find them rather condescending thanks. I have already explained that i import from Asia for a living. I am fully aware of how the process works.

All I asked directly of the company, in the open forum they advertise on here was for clarification. Nothing more. My post was then moved, as you deemed it should be elsewhere. I then added more general factual information after the move. I do not have a problem with anyone buying and importing. I have added factual information about the process that will hopefully help all.

Matt, I appear to have caused you unrest, but don't know why. Suggesting I should also email eBay and the like - why? Someone posted on here. I asked for clarification on here. Where's the problem? Why do you think it should be for PM - others have already indicated it is of interest to them.
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your question was answered in the reply ive quoted - they prepay the vat, as per MoU I quoted, but you seem to feel that you need more information.. Given the information there and the MoU rules, I'd say you're question was answered?
As for causing me unrest, I dont like FUD being spread on my forum.
 
Fear, uncertainty and doubt - if you believe that's what I have done, then little I say will change it. My intention was never to do so, and I will state this openly as my last comment on this particular thread.
 
Implying that plod could come for you if you import certainly seems like FUD to me.

nothing more to say here, weve got DR saying they pay the vat their end and any duty you may get hit for here if there is any, and an extract from the trading agreement that most of the hong kong companies operate under, i think that answers its own questions, though a few will remain unanswered for the time being.
 
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