Grey Imports...How to spot them?

[Eloise]

Pretty sure I looked logically in terms and did a word search for importer......the word did not appear???, that is why I asked because I was sure this with HDEW had come up before.

INTELLECTUAL PROPERTY RIGHTS.

Please note that by making a purchase on this website you will be acting as the importer of the product for all purposes including all customs regulations,copyright and trademark laws.You accept that the role of HDEW Cameras is limited to sourcing products and making them available for you to import directly from the country of origin.By purchasing a product through this website you authorise us to make arrangements for clearance of customs on your behalf for the products you have ordered.​

(from https://www.hdewcameras.co.uk/terms.asp)

 

[NSNO]

And here's a DigitalRev customer who found that DigitalRev valued their item at 10% of its actual value on the Declaration.



https://www.talkphotography.co.uk/t...ing-orders-on-the-customs-declaration.601784/

Just as an update to this if anybody cares, it was taken care of by DR so I didn't have to pay anything

 

[Dave *]

Just as an update to this if anybody cares, it was taken care of by DR so I didn't have to pay anything

From what I gather they usually do, the business model appears to work on the basis of paying for the odd parcel getting caught while the majority get through undetected.

Out of interest, can you remember what the actual amount declared was, and was it declared as a camera?

 

[Canon Bob]

And here's a DigitalRev customer who found that DigitalRev valued their item at 10% of its actual value on the Declaration.

Looks like I was stung....mine was 14% of its value

 

[NSNO]

From what I gather they usually do, the business model appears to work on the basis of paying for the odd parcel getting caught while the majority get through undetected.

Out of interest, can you remember what the actual amount declared was, and was it declared as a camera?

I don't remember the amount but I think it was declared as a second hand camera

 

[Eloise]

I don't remember the amount but I think it was declared as a second hand camera

So it was misdeclared. (Unless it really was a second hand camera!)

 

[Phil V]

From a mate who works at HMRC, the 3 key import tax frauds are:
Incorrect description
Incorrect value
Incorrect origin

And it appears that grey importers of cameras have used all 3.

But I’m sure someone will be along shortly to ‘prove’ that incorrect as they’ve bought loads of stuff and no ones been prosecuted.

 

[Riz_Guru]

Do HMRC Customs check goods which enter the into the UK to ensure that the correct Tax is being paid on them?

 

[Dave *]

Do HMRC Customs check goods which enter the into the UK to ensure that the correct Tax is being paid on them?

At present it seems they only spot check, so it's just a gamble if it gets caught or not.

The government is considering changing the method of collecting vat on overseas purchases so it might soon be irrelevant if they go through with it.

 

[Dave *]

Looks like I was stung....mine was 14% of its value

Do you feel less of a valued customer now?

 

[Riz_Guru]

Do you feel less of a valued customer now?

lol

 

[Canon Bob]

Do you feel less of a valued customer now?

I do Dave. Seems that I need to be more choosey next time I employ someone to make a fraudulent declaration on my behalf.

 

[HoppyUK]

At present it seems they only spot check, so it's just a gamble if it gets caught or not.

The government is considering changing the method of collecting vat on overseas purchases so it might soon be irrelevant if they go through with it.

Spot check hardly covers it - a microscopic check. Take a look at the monster China Shipping Line vessel - just one ship that carries 19,000 containers at a time HMRC definitely needs a Plan B.

https://en.wikipedia.org/wiki/CSCL_Globe

 

[Dave *]

Spot check hardly covers it - a microscopic check. Take a look at the monster China Shipping Line vessel - just one ship that carries 19,000 containers at a time HMRC definitely needs a Plan B.

https://en.wikipedia.org/wiki/CSCL_Globe

Though I suspect the majority of the high value fraud (like digital cameras from HK retailers) comes in by air, so should be a bit easier to do more checks on if they wanted to.

 

[HoppyUK]

Though I suspect the majority of the high value fraud (like digital cameras from HK retailers) comes in by air, so should be a bit easier to do more checks on if they wanted to.

Take your point, but we're not just talking about cameras but a whole raft of consumer goods - whatever the heck is in that bluddy great ship. Whichever way you look at it, the scale is mind boggling. The answer must lie in legislation and self-regulation of some sort.

HMRC could make a start with just a few well-publicised scare stories of prosecutions, pointing out the damage being done with UK retailers closing down, loss of employment, not to mention the illegally of it all and loss of tax revenue. A wake-up call might be all it takes.

On the other hand, I wonder if the government is now actually too frightened to act harshly, it would pee-off a lot of people and, the way human psychology works, it might actually be seen as yet another unpopular back-door tax. So... maybe this is the way we now do international business and the concept of import duty and VAT needs a fundamental rethink. It's pointless having rules and regulations if everybody ignores them and they can't be enforced. As King Canute discovered, and more recently(!) US presidents too when they rant about China ripping off their intellectual property when all the time it's US consumers who are buying the stuff. It all falls on deaf ears, money conquers all, but the taxes still have to be raised one way or another.

 

[StewartR]

Take your point, but we're not just talking about cameras but a whole raft of consumer goods - whatever the heck is in that bluddy great ship. Whichever way you look at it, the scale is mind boggling. The answer must lie in legislation and self-regulation of some sort.

HMRC could make a start with just a few well-publicised scare stories of prosecutions, pointing out the damage being done with UK retailers closing down, loss of employment, not to mention the illegally of it all and loss of tax revenue. A wake-up call might be all it takes.

On the other hand, I wonder if the government is now actually too frightened to act harshly, it would pee-off a lot of people and, the way human psychology works, it might actually be seen as yet another unpopular back-door tax. So... maybe this is the way we now do international business and the concept of import duty and VAT needs a fundamental rethink. It's pointless having rules and regulations if everybody ignores them and they can't be enforced. As King Canute discovered, and more recently(!) US presidents too when they rant about China ripping off their intellectual property when all the time it's US consumers who are buying the stuff. It all falls on deaf ears, money conquers all, but the taxes still have to be raised one way or another.

Some interesting points there Richard. It's a thoroughly unsatisfactory situation, but there may not be a solution which is politically easy.

 

[Box Brownie]

Take your point, but we're not just talking about cameras but a whole raft of consumer goods - whatever the heck is in that bluddy great ship. Whichever way you look at it, the scale is mind boggling. The answer must lie in legislation and self-regulation of some sort.

HMRC could make a start with just a few well-publicised scare stories of prosecutions, pointing out the damage being done with UK retailers closing down, loss of employment, not to mention the illegally of it all and loss of tax revenue. A wake-up call might be all it takes.

On the other hand, I wonder if the government is now actually too frightened to act harshly, it would pee-off a lot of people and, the way human psychology works, it might actually be seen as yet another unpopular back-door tax. So... maybe this is the way we now do international business and the concept of import duty and VAT needs a fundamental rethink. It's pointless having rules and regulations if everybody ignores them and they can't be enforced. As King Canute discovered, and more recently(!) US presidents too when they rant about China ripping off their intellectual property when all the time it's US consumers who are buying the stuff. It all falls on deaf ears, money conquers all, but the taxes still have to be raised one way or another.

Some interesting points there Richard. It's a thoroughly unsatisfactory situation, but there may not be a solution which is politically easy.

Horses gotten out of the stable before the doors were bolted ~ comes to mind.

The not so brave new world of poorly regulated global businssses is here..........but as you both say/infer any regulatory controls or changes brought in or enforced "now" will be difficult to handle.

Hmmmm! not unlike trump's promise to his supporters in the rust belt making him push for steel & aluminium tarrifs..... upsetting not only global partnerships but also by the none too surprising impact on US businesses of the statements of retaliation including the EU.

"No good (political) deed goes unpunished...."

 

[Canon Bob]

On the other hand, I wonder if the government is now actually too frightened to act harshly, it would pee-off a lot of people and, the way human psychology works, it might actually be seen as yet another unpopular back-door tax.

That's possible, Richard, although they did limit the amount of tax paid tobacco products that could be brought back from other EU countires......equally, if not more, unpopular I would have thought.

Bob

 

[HoppyUK]

That's possible, Richard, although they did limit the amount of tax paid tobacco products that could be brought back from other EU countires......equally, if not more, unpopular I would have thought.

Bob

I think there are two sides to it. The political side that could back-fire if it's seen as unpopular with too many voters, but governments are no strangers to that and it would probably blow over. But then there's the simple impossibility of anything like proper enforcement, that would need an army of customs inspectors, cost more than the revenues raised and create unacceptable delays, so what's the point?

When you look at the much bigger picture, and the huge implications it has for our overall tax system, it's perhaps no wonder that HMRC prefers to sit on its hands.

 

[Eloise]

Take your point, but we're not just talking about cameras but a whole raft of consumer goods - whatever the heck is in that bluddy great ship. Whichever way you look at it, the scale is mind boggling. The answer must lie in legislation and self-regulation of some sort.

HMRC could make a start with just a few well-publicised scare stories of prosecutions, pointing out the damage being done with UK retailers closing down, loss of employment, not to mention the illegally of it all and loss of tax revenue. A wake-up call might be all it takes.

While I don't really want to bring the B word into this debate... the UK Gov may be *forced* to do something as the EU are unhappy about the amount of lost tax revenue due to goods coming through the UK and into the EU as a whole. Currently though HMRC (and specifically Border Force who in the UK's enforce customs check) are under resourced for the kind of checks and enforcement required - overall the scale may be huge, but each parcel / packet is seen individually. Ironically for the EU they may be in a better position to try to force the UK into acting now than they were before.

From an ECA (European Court of Auditors) press release (footnoted "The purpose of this press release is to give the main messages of the special report by the European Court of Auditors.") and while it talks specifically about textiles and footwear, no doubt other goods pass in similar way...

The auditors found that a lack of requests for guarantees by the UK led to significantly undervalued Chinese goods being cleared in the UK and then transported back to continental Europe. Undervalued Chinese textiles and footwear were sent from Hamburg to Dover, where they were released for circulation in the EU without release controls, and then transported back to Poland or Slovakia. A joint operation in 2016 by French customs and OLAF* confirmed that this undervaluation fraud took place mainly in the UK and was compounded by the fact that VAT was not paid in the destination Member States. Fake invoices were 5 to 10 times undervalued. According to OLAF, between 2013 and 2016, the UK should have made available nearly €2 billion more in customs duties than it did.
​

Note *: OLAF is the European Commision Anti-fraud Office and has no relation to the snowman in Frozen.

 

[HoppyUK]

While I don't really want to bring the B word into this debate... the UK Gov may be *forced* to do something as the EU are unhappy about the amount of lost tax revenue due to goods coming through the UK and into the EU as a whole. Currently though HMRC (and specifically Border Force who in the UK's enforce customs check) are under resourced for the kind of checks and enforcement required - overall the scale may be huge, but each parcel / packet is seen individually. Ironically for the EU they may be in a better position to try to force the UK into acting now than they were before.

From an ECA (European Court of Auditors) press release (footnoted "The purpose of this press release is to give the main messages of the special report by the European Court of Auditors.") and while it talks specifically about textiles and footwear, no doubt other goods pass in similar way...

The auditors found that a lack of requests for guarantees by the UK led to significantly undervalued Chinese goods being cleared in the UK and then transported back to continental Europe. Undervalued Chinese textiles and footwear were sent from Hamburg to Dover, where they were released for circulation in the EU without release controls, and then transported back to Poland or Slovakia. A joint operation in 2016 by French customs and OLAF* confirmed that this undervaluation fraud took place mainly in the UK and was compounded by the fact that VAT was not paid in the destination Member States. Fake invoices were 5 to 10 times undervalued. According to OLAF, between 2013 and 2016, the UK should have made available nearly €2 billion more in customs duties than it did.
​

Note *: OLAF is the European Commision Anti-fraud Office and has no relation to the snowman in Frozen.

So the EU is unhappy with goods coming into mainland Europe tax-free though our ports? Long may they prosper - and I'm sure UK government agrees

But seriously, what do they expect us to do about it? That's the issue. And there must be tons of stuff coming the other way, from European ports tax-free into the UK. How do they handle that? I bet the same applies - basically, they don't.

Edit: and less seriously, if shoes are the problem, then I reckon that China Shipping Line monster container vessel linked earlier can carry 80.7m boxed pairs
Double edit: just a bit more sillyness but to illustrate the sheer scale of it all, if 100 customs inspectors were employed on a 40-hour week to check that lot and they took an average of ten seconds per box, they would all be at it for 14 months. With no holiday.

 

[Eloise]

So the EU is unhappy with goods coming into mainland Europe tax-free though our ports? Long may they prosper - and I'm sure UK government agrees

But seriously, what do they expect us to do about it? That's the issue. And there must be tons of stuff coming the other way, from European ports tax-free into the UK. How do they handle that? I bet the same applies - basically, they don't.

No, it was a European wide study, that was just a quote though they did find U.K. particularly bad.

And what do they expect the U.K. to do? I suspect they expect the U.K. to abide by agreements and police the “laws” they signed up to.

 

[simonbarker]

And what do they expect the U.K. to do? I suspect they expect the U.K. to abide by agreements and police the “laws” they signed up to.

That's not a hugely constructive argument, every country flaunts rules for their own convenience.

 

[Nikon f1.8]

With Canon bodies the 3rd figure of the serial number denotes the original (intended) market;
1) Asia
2) North America
3) Europe

The 3rd figure on my 5D Mk IV is a 5!

and my 80D is a 4

 

[StewartR]

While I don't really want to bring the B word into this debate... the UK Gov may be *forced* to do something as the EU are unhappy about the amount of lost tax revenue due to goods coming through the UK and into the EU as a whole....

Maybe, but this issue is half way down page 73 of the list of Brexit issues that haven't been thought out properly, and I can envisage alternative outcomes.

Currently, EU countries have to comply with quite a lot of EU-wide rules about how the VAT scheme operates. Basic rate must be at least 15%, no zero rates except for 'grandfathered' situations, limits on what can be exempted, etc. Plus there are rules about cross-border sales, VAT accounting for multi-nationals, and so on. How much of that will apply after we leave the EU? How much scope will the UK have to vary its VAT scales? Where will VAT be chargeable when a supplier in the UK sells to a customer in the EU, or vice versa? (At the origin, as now, or at the destination, as is the case for imports from outside the EU?)

I haven't seen any meaningful discussion of these issues. And believe me I have looked, because VAT post-Brexit is a HUUUUGE issue for my business. [*]

Personally, I think the UK probably will not remain part of the EU VAT arrangements, because it smells a bit too single-markety. I think we will probably move to a situation like we do via a vis other countries, which is basically that VAT is chargeable on imports but is not chargeable on exports. That means the EU won't have any right to tell us what to do about lost tax revenue, but then it won't matter to them because goods imported from the UK would have VAT charged at the point of entry into the EU; if we didn't bother charging VAT when foreign goods were imported into the UK, that would be our problem and nobody else's.

Of course I could be wrong about this. When you get as far as page 73 it's all speculation.

[*] In case you were wondering: There's a provision in the VAT rule book which says that VAT is not chargeable when items are hired for use outside the EU. If that "outside the EU" bit becomes "outside the UK" after Brexit, that will mean a significant proportion of my customers could get their hires VAT-free, which would be a big boost for business.

 

[johnf3f]

See the link in my post.

Thanks for that link. Well that was sneaky of them (Portus) as I am pretty sure that wording has changed since I dealt with them a while ago. Also if you look in their FAQs they state everything relevant is paid (just double checked) https://www.portusdigital.com/faq/

That could very easily catch one out and may well have caught me out too! I will have to fire up my old PC as I think I downloaded the T&C page when I bought the camera. Thanks for the "Heads Up".

 

[johnf3f]

Well th

Do HMRC Customs check goods which enter the into the UK to ensure that the correct Tax is being paid on them?

Well they have checked everything I have bought from the US and New Zealand + charged where appropriate. I have only ordered cheap bits and bobs from China (£10 or less actual value) so they probably didn't bother.

 

[Dave *]

Thanks for that link. Well that was sneaky of them (Portus) as I am pretty sure that wording has changed since I dealt with them a while ago. Also if you look in their FAQs they state everything relevant is paid (just double checked) https://www.portusdigital.com/faq/

That could very easily catch one out and may well have caught me out too! I will have to fire up my old PC as I think I downloaded the T&C page when I bought the camera. Thanks for the "Heads Up".

Though they are playing with words in that assurance.

What about tax & duty?

The total on your invoice includes applicable taxes & charges.

If they only declare the value at £100, for example, the applicable taxes and charges would be £20. Meanwhile, you actually bought a £1000 camera...

 

[Canon Bob]

Take your point, but we're not just talking about cameras but a whole raft of consumer goods - whatever the heck is in that bluddy great ship. Whichever way you look at it, the scale is mind boggling. The answer must lie in legislation and self-regulation of some sort.

Very prophetic, Richard

http://www.bbc.com/news/uk-politics-43328398

 

[HoppyUK]

Very prophetic, Richard

http://www.bbc.com/news/uk-politics-43328398

The more you look, the deeper and more complicated it gets. Our largest container port, Felixstowe, is the only UK port in the world's top 50 with 4m TEU of volume. Rotterdam does 12m, Antwerp 10m, Hamburg 9m, and they're all completely dwarfed by a multitude of Chinese ports. So there must be a reason why dodgy international traders choose the UK, and it cannot be just consumer goods that are slipping through but all kinds of unpleasant stuff like firearms and explosives and drugs and God knows what.

 

[RedRobin]

Very prophetic, Richard

http://www.bbc.com/news/uk-politics-43328398

....The news article suggests that HMRC do not agree with the EU tax liability assessment.

I expect that either very extensive negotiations will be entered into or a very long and expensive court case.

 

[HoppyUK]

....The news article suggests that HMRC do not agree with the EU tax liability assessment.

I expect that either very extensive negotiations will be entered into or a very long and expensive court case.

There is every reason to be suspicious of anything Brexit related these days, from either side TBH.

But just looking at the sheer volume of stuff floating up the Channel, the big container ports of mainland Europe mentioned above handle 8x more than we do. Yet if most of the problem goods are allegedly coming in via the UK as the EU claims, then how on earth have they managed to control it all so well? Magic?

Given the massive disparity, and the apparent absence of magic, it seems quite likely that the EU actually owes us more than we owe them in tax fraud and unpaid VAT. Grey imports are not just a UK problem.

 

[RedRobin]

There is every reason to be suspicious of anything Brexit related these days, from either side TBH.

Given the massive disparity, and the apparent absence of magic, it seems quite likely that the EU actually owes us more than we owe them in tax fraud and unpaid VAT.

....They say that attack is the best form of defence, hence the EU claims. It's all part of the larger picture of Brexit 'negotiations' too. It will all wash out in time and the next big issue will follow soon enough.

 

[simonbarker]

But just looking at the sheer volume of stuff floating up the Channel, the big container ports of mainland Europe mentioned above handle 8x more than we do. Yet if most of the problem goods are allegedly coming in via the UK as the EU claims, then how on earth have they managed to control it all so well? Magic?

Does seem unlikely somehow, assuming this isn't Brexit related of course. Do we do things especially different compared to other ports?

 

[HoppyUK]

Does seem unlikely somehow, assuming this isn't Brexit related of course. Do we do things especially different compared to other ports?

Well it is Brexit related, no escaping that, and the EU's determination to make our departure as lengthy, as tortuous and as costly as possible, almost regardless of anything else, to stop other member states from following and the whole house of cards collapsing.

Maybe they just have a more efficient system, but given the colossal scale of it all, then it would surely be pretty obvious even to HMRC.

Eloise?

 

[Phil V]

Well it is Brexit related, no escaping that, and the EU's determination to make our departure as lengthy, as tortuous and as costly as possible, almost regardless of anything else, to stop other member states from following and the whole house of cards collapsing.

Maybe they just have a more efficient system, but given the colossal scale of it all, then it would surely be pretty obvious even to HMRC.

Eloise?

Richard, you yourself wrote that HMRC aren’t even examining 1% of items entering the country.

After 15 years of budget reductions in HMRC, are you seriously blaming Brexit?

How about blaming the more obvious ‘austerity’ spending of government. I’ve said it before only idiots can cheer ‘spending cuts across government’ as a universal benefit to the taxpayer, it ought to be obvious that cutting spending in revenue collecting is a risky business.

 

[HoppyUK]

Richard, you yourself wrote that HMRC aren’t even examining 1% of items entering the country.

After 15 years of budget reductions in HMRC, are you seriously blaming Brexit?

How about blaming the more obvious ‘austerity’ spending of government. I’ve said it before only idiots can cheer ‘spending cuts across government’ as a universal benefit to the taxpayer, it ought to be obvious that cutting spending in revenue collecting is a risky business.

No, totally agree. I'm just saying that the EU now claiming we owe £2.4bn in lost import tax is Brexit related, as per Bob's link.

 

[RedRobin]

Richard, you yourself wrote that HMRC aren’t even examining 1% of items entering the country.

After 15 years of budget reductions in HMRC, are you seriously blaming Brexit?

....I think that Richard was specifically referring to the allegation against the HMRC by the EU which was because of Brexit.

[EDIT : I posted this at the same time Richard posted his answer in confirmation]

 

[Eloise]

No, totally agree. I'm just saying that the EU now claiming we owe 2.9bn Euros in lost import tax is Brexit related, as per Bob's link.

Not really Brexit related... the €2bn goes back to a report examining the whole of the EU and customs / duty collection... https://www.eca.europa.eu/Lists/ECADocuments/SR17_19/SR_CUSTOMS_EN.pdf

The auditing ran from 2007 to 2017.

 

[RedRobin]

Not really Brexit related... the €2bn goes back to a report examining the whole of the EU and customs / duty collection... https://www.eca.europa.eu/Lists/ECADocuments/SR17_19/SR_CUSTOMS_EN.pdf

The auditing ran from 2007 to 2017.

....But although this goes back awhile, isn't it now being brought up by the EU (according to the BBC News link above) as part of the Brexit negotiations?