Panamoz, Hdew, etc etc

[ShinySideUp]

Amazon have refunded my money from my brand new and faulty Nikon D750 so I'm looking to buy again and I have followed chat about Panamoz etc with great interest and find myself tempted by the savings but also extremely concerned about faulty goods, returns and warranties.

Generally, both shop-front and well-known internet retailers are selling the D750 for £1799, give or take a bit, but Panamoz and the like are doing the same camera for about £1300 -- generally about five hundred quid cheaper.

Now call me a cynic but I've always followed the maxim that if something seems to good to be true it probably is and these prices seem to fall into this category.

My basic question is: how do these discounting retailers mange to knock five hundred smackers off the normal price? Why is it that they do not have the Nikon warranty? If there practices are up there with established retailers why do they not sweep the board in sales (can't be just because of people like me, can it?)?

 

[MWHCVT]

Because they're not paying the tax and duty on the cameras they supply generally...at least that's the consensus of many people who have looked into it a lot more than I have

 

[droj]

My understanding is that the reputable ones will both issue their own warranty that will be effective in the UK (using independent repairers), and should also indemnify you against customs and excise charges in the slim chance of your personal package being investigated on it's way from Hong Kong. Take your pick. It's a sort of tax dodge, as I see it, so there may be an ethical consideration (including unfair undercutting of legitimate UK retailers).

 

[ShinySideUp]

I had a closer look at Hdew's site and they say that the first year of warranty is the manufacturers own but they say, and I quote "All products come with a standard 1-year manufacturers warranty based on the sales invoice you receive with the product". But Nikon's own warranty is based on their warranty card, the yellow one that comes with all Nikon products, plus any sales invoice; something just doesn't sound quite pucka.

I know I'm going to get the "if you don't like it, buy it for the going price in the UK", but I'm just trying to investigate the alternatives out of interest so don't flame me for that.

 

[momoka]

Consider all the points above but also consider this - buy from Panamoz, pay the VAT yourself, it is still a bigger saving to consider. There are mixed reports that Nikon honours warranties on equipment from Panamoz.

And keeping costs to a minimum, you could even get it quicker via the likes of Panamoz than you would from some of the UK online retails.

 

[dalegt4]

Digital rev are superb, my 70-200 2.8 had a os problem, they got it fully fixed and repaired for me no questions asked.

 

[jimmyleaman]

Brought most of my gear from Panamoz and can't fault them.

 

[ianp5a]

Panamoz say VAT is included.: From their website:
Why Buy From Panamoz.com?
** Free 3 Year UK Warranty
** 14 Day Money Back Guarantee
** Price includes VAT
** No hidden or extra charges
** All products are 100% new from the factory
** Free express shipping with full insurance
** Delivery in 4-6 business days
** Secure payment with PayPal or credit/debit card
** Best after sales support and coverage

 

[robj20]

Panamoz for me, the one time i did get charged import duty they refunded me within the hour. Delivery is usually about 3-4 days.

Dont forget you can save another 5% by paying by bank transfer which i use every time.

 

[Sharky]

HDEW is a good choice (body is £1295) as they are UK based (altho still a grey import), 3 year warranty and i've heard nothing but good things about their aftersales support.

 

[robj20]

£1187.50 with panamoz

 

[OldCarlos]

Cotswold Cameras (also grey) @ £1289

 

[Canon Bob]

My basic question is: how do these discounting retailers mange to knock five hundred smackers off the normal price?

I can't say for all the grey importers but I suspect that the philosophy is similar across the board. The declared value of the goods when imported into the EU/UK bears no resemblance to the price paid by the customer and the VAT and import duty ( % of the value) is therefore drastically reduced.

For example (and taking profit margin out of the equation)....
A lens retailing at £1000 on the high street will actually be £800 +vat +import duty (£200 approx) when everything is administered "normally".
If that lens is given a value of £100 at importation then the VAT and import duty will be £26 giving a total of £826....a saving of £175 approx.
I'm not suggesting that the declared value is lowered fraudulently and it may be that shadow companies are middle men who trade at a massive loss by buying in at normal prices and then selling on at a fraction of that price.

Bob

 

[HoppyUK]

Bottom line is, grey importers can only offer significantly lower prices by avoidance of import duty and VAT. There is a lot of smoke and mirrors, creative accounting, and plain lies involved, but that's at the heart of it.

 

[Canon Bob]

Bottom line is, grey importers can only offer significantly lower prices by avoidance of import duty and VAT. There is a lot of smoke and mirrors, creative accounting, and plain lies involved, but that's at the heart of it.

Over here (France) the consignee also gets a copy of the import documents when something is shipped by a grey importer. I have the import documents for a lens that I paid £750 for (Euro equivalent) and the declared value was £98.60....that's about £135 less in taxes than a high street dealer would have paid.

Bob

 

[HoppyUK]

Over here (France) the consignee also gets a copy of the import documents when something is shipped by a grey importer. I have the import documents for a lens that I paid £750 for (Euro equivalent) and the declared value was £98.60....that's about £135 less in taxes than a high street dealer would have paid.

Bob

A friend showed me the packaging from a grey Canon 7D, with customs declaration. It was marked as a gift, value $10, made in China!

Some companies that say 'VAT paid' actually mean they will refund the VAT, after the buyer has paid it, if you get caught.

 

[StewartR]

Bottom line is, grey importers can only offer significantly lower prices by avoidance of import duty and VAT. There is a lot of smoke and mirrors, creative accounting, and plain lies involved, but that's at the heart of it.

It's as simple as that, but I'd say "evasion" instead of "avoidance" in these cases. There's no legal way of avoiding VAT if your turnover is high enough. The UK market is very, very competitive (*) and there's no big far margins to be undercut.

(*) With the notable exception of newly released equipment, where UK retailers tend to charge an 'early adopter' premium more enthusiastically than retailers in other countries.

 

[Llamaman]

It's a sort of tax dodge

'Tax dodge' would normally be used to describe an iffy tax avoidance scheme.
What most grey importers are doing is plain evasion. They only get away with it because the revenue authorities are under-resourced.

They may offer a warranty, but I'd value a warranty offered by a business whose whole trading model is based on criminal activity as being worth slightly less than the paper the false customs declaration is written on.

 

[momoka]

A friend showed me the packaging from a grey Canon 7D, with customs declaration. It was marked as a gift, value $10, made in China!

Some companies that say 'VAT paid' actually mean they will refund the VAT, after the buyer has paid it, if you get caught.

That has been what I have seen happen, it still works out cheaper than buying from the likes of WEX etc

 

[momoka]

'Tax dodge' would normally be used to describe an iffy tax avoidance scheme.
What most grey importers are doing is plain evasion. They only get away with it because the revenue authorities are under-resourced.

They may offer a warranty, but I'd value a warranty offered by a business whose whole trading model is based on criminal activity as being worth slightly less than the paper the false customs declaration is written on.

I've never had a problem using Canon to cover the warranty. I know it has being a mixed result for others though.

 

[Canon Bob]

'Tax dodge' would normally be used to describe an iffy tax avoidance scheme.
What most grey importers are doing is plain evasion. They only get away with it because the revenue authorities are under-resourced.

Supposition or fact Andy?

Hypothetical situation using hypothetical companies......
"Panaplonkers" buy a £1000 lens from "Canikon" and they then sell it to "Panamuppets" for £100.....the transactions occurring outside the EU.
"Panamuppets" then imports the lens into the EU declaring a value of £100 and pay the duty on that amount. They subsequently sell it for £1000 to an EU consumer.
"Panamuppets" make a large profit on the deal and "Panaplonkers" make a similarly sized loss.
Is this avoidance or evasion?....I'd say that it was avoidance.

Bob

 

[Llamaman]

When it's described as a $10 gift, then it's evasion.

The situation you've described is a wholly artificial construct with no commercial rationale and would fail the most basic transfer pricing audit.
Under UK rules, that behaviour would be considered abusive and extremely aggressive. You might avoid an evasion charge but you'd lose at a tax tribunal, and would probably incur a tax-geared penalty of 100%, plus interest.

I also doubt custom rules allow you to make valuations based upon intra-group transfers at below market value. I can't say for certain on this one as I specialise in direct rather than indirect taxes - I'll ask a colleague at work on Monday.

 

[realspeed]

I have bought from HDEW and happy to pay a lot less for an expensive lens and pleased with their service, but for cameras I stick with main dealers.

 

[Bernie174]

I am not so sure that there is VAT Avoidance/evasion.
So I had a look at the price of a Canon 7D mk2 in Hong Kong. If bought in HKD the place I found was HKD13,180
Using an online converter that comes to £1085.
The import duty is VAT only, Digital Cameras are exempt from other duty rates. So add in the VAT to £1085 the price is £1302. As opposed to the price at for example Wex where its £1599. OK, thats only £300 cheaper, but the HK price is a retail price for one unit, and in one shop. If an importer negotiated bulk, it would be considerably cheaper than that, and probably exempt from local sales taxes as they would be for export, that results in both a lower base price and a lower VAT payment on import to the UK.
So buying abroad and paying the VAT on import is a much cheaper way of buying which is how I think the likes of Hdew and co are doing it.
Perhaps the issue here isn't one of fraud/fiddling the books, it's more that the manufacturers are ramping up the charges for different markets.

 

[RedRobin]

So, if the documentation (sales receipt / invoice) of your grey import states that a £1,000 product is only worth £100 (my quoted figures are only to illustrate the principle), then how does that leave you if you are unfortunate enough to have to make an insurance claim for say theft etc? Don't insurers usually require proof of your purchase and price before agreeing to pay?

As it diminishes their business, I would expect that 'Canikon' and others will be taking action in the not-too-distant future to plug this leak. They can do so easily by asking for copy of invoice when registering, monitoring product serial numbers and refusing to honour warranties on grey imports.

Much as I would prefer, like everyone, to pay low prices for new camera gear I personally do not trust grey importers in spite of trouble-free reports in this forum. There is also the fact that selling on a grey import is more difficult and significantly lowers your selling price. As for part exchange.... ?

 

[Bernie174]

So, if the documentation (sales receipt / invoice) of your grey import states that a £1,000 product is only worth £100 (my quoted figures are only to illustrate the principle), then how does that leave you if you are unfortunate enough to have to make an insurance claim for say theft etc? Don't insurers usually require proof of your purchase and price before agreeing to pay?

It's quite simple, you payed X to thew person you bought it from, the value is therefore X.

The manufacturers could very easily 'plug' the gap by simply harmonizing prices across the world, at a stroke it would kill the gray market.

 

[Llamaman]

So, if the documentation (sales receipt / invoice) of your grey import states that a £1,000 product is only worth £100 (my quoted figures are only to illustrate the principle), then how does that leave you if you are unfortunate enough to have to make an insurance claim for say theft etc? Don't insurers usually require proof of your purchase and price before agreeing to pay?

You'd be OK there as your invoice/receipt would show the £1000 paid rather than the £100 fiction on the customs declaration.

 

[HoppyUK]

UK distributors are understandably miffed by the whole grey import business, sometimes refusing warranty work and posting warnings on their websites, eg Sigma UK http://www.sigma-imaging-uk.com/image/data/pdf/Going Grey - Leaflet - Low Res.pdf

But there's another interesting angle to that. The manufacturers know full well who they sell products to and the serial numbers trace it right through the supply chain to consumers. In other words, they could stop the whole grey importing business tomorrow, if they wanted to. But AFAIK, no manufacturer has ever even attempted to do this, drawing the conclusion that they don't actually care - so long as they get paid the ex-factory price and their production lines keep rolling.

The other puzzling aspect of it all is why HMRC don't clamp down on it. It's hardly difficult to spot and they would easily claim mi££ions in tax revenues. They would protect hundreds of UK retail jobs too. Why doesn't the UK photo industry get together and petition MPs? All it would take is a few well publicised examples of grey customers getting fined and equipment confiscated (because it's illegal, and the customer is the one responsible for tax) to put the brakes on it at least.

And this throws up a personal dilemma for me - why should I be worried about the 'moral' aspects of grey importing when those with their hands on the tiller can't be arsed?

 

[ianp5a]

I guess it's no different to buying something when you are abroad. If I found and bought a camera cheaper somewhere, I wouldn't feel compelled to tell customs at Heathrow when I got back. I don't think that makes me a crook.

 

[steveo_mcg]

UK distributors are understandably miffed by the whole grey import business, sometimes refusing warranty work and posting warnings on their websites, eg Sigma UK http://www.sigma-imaging-uk.com/image/data/pdf/Going Grey - Leaflet - Low Res.pdf

But there's another interesting angle to that. The manufacturers know full well who they sell products to and the serial numbers trace it right through the supply chain to consumers. In other words, they could stop the whole grey importing business tomorrow, if they wanted to. But AFAIK, no manufacturer has ever even attempted to do this, drawing the conclusion that they don't actually care - so long as they get paid the ex-factory price and their production lines keep rolling.

The other puzzling aspect of it all is why HMRC don't clamp down on it. It's hardly difficult to spot and they would easily claim mi££ions in tax revenues. They would protect hundreds of UK retail jobs too. Why doesn't the UK photo industry get together and petition MPs? All it would take is a few well publicised examples of grey customers getting fined and equipment confiscated (because it's illegal, and the customer is the one responsible for tax) to put the brakes on it at least.

And this throws up a personal dilemma for me - why should I be worried about the 'moral' aspects of grey importing when those with their hands on the tiller can't be arsed?

"they" did nothing when any other industry has been transformed by the Internet why should they care if the UK based online retailers are killed off by foreign owned ones. Nothing was done when Amazon or iTunes came after the book or music retail stores.

I'd be happy paying the VAT on import, all of the lenses I've brought in from Japan have been charged, I do hate the handling fee that the courier charge but that can't be helped.

 

[StewartR]

Hypothetical situation using hypothetical companies......
"Panaplonkers" buy a £1000 lens from "Canikon" and they then sell it to "Panamuppets" for £100.....the transactions occurring outside the EU.
"Panamuppets" then imports the lens into the EU declaring a value of £100 and pay the duty on that amount. They subsequently sell it for £1000 to an EU consumer...

Interesting thought experiment, Bob.

I'm not a tax lawyer but I can't imagine that arrangement would possibly survive any kind of HMRC inspection.

One other problem with it, though, is that the EU selling price of £1000 has to attract VAT. The transfer pricing game *might* avoid import duty, but in the UK that's only 6.9% on lenses and nothing on bodies. It does nothing about VAT.

 

[StewartR]

I am not so sure that there is VAT Avoidance/evasion.
So I had a look at the price of a Canon 7D mk2 in Hong Kong. If bought in HKD the place I found was HKD13,180
Using an online converter that comes to £1085.
The import duty is VAT only, Digital Cameras are exempt from other duty rates. So add in the VAT to £1085 the price is £1302. As opposed to the price at for example Wex where its £1599.

That isn't a good example, Bernie. It's been well documented that, whenever new equipment is launched, UK retailers are far more enthusiastic at exploiting the must-have-it-now-at-any-price brigade than retailers in other countries are.

Try the comparison again using a basket of products which aren't new to the market. I expect you'll see a small price advantage to HK, because their overheads (wages, employment taxes, corporation taxes, consumer protection legislation) are genuinely lower than here. But it won't be a big advantage.

 

[StewartR]

The manufacturers could very easily 'plug' the gap by simply harmonizing prices across the world, at a stroke it would kill the gray market.

They are largely harmonised. The grey market is driven by tax issues, not wholesale prices.

 

[gramps]

Try the comparison again using a basket of products which aren't new to the market. I expect you'll see a small price advantage to HK, because their overheads (wages, employment taxes, corporation taxes, consumer protection legislation) are genuinely lower than here. But it won't be a big advantage.

D610
Wex £1285:00
Panamoz £907:00

D7100
Wex £768:00
Panamoz £560:00

Df
Wex £2099:00
Panamoz £1429:00

 

[StewartR]

The manufacturers ... could stop the whole grey importing business tomorrow, if they wanted to. But AFAIK, no manufacturer has ever even attempted to do this, drawing the conclusion that they don't actually care - so long as they get paid the ex-factory price and their production lines keep rolling.

I think you're right. Even if they could stop the grey market - and I don't think it's as easy as you imply, but that's a different issue - why should they care whether a camera sold in HK ends up being used in HK or UK?

The other puzzling aspect of it all is why HMRC don't clamp down on it. It's hardly difficult to spot and they would easily claim mi££ions in tax revenues. They would protect hundreds of UK retail jobs too. Why doesn't the UK photo industry get together and petition MPs? All it would take is a few well publicised examples of grey customers getting fined and equipment confiscated (because it's illegal, and the customer is the one responsible for tax) to put the brakes on it at least.

I think the problem here is that there's no real evidence for HMRC to work with.

There are two types of grey market operation. The first is when consumers buy direct from (say) HK and are liable for the taxes, but don't volunteer to pay them. Who's ever going to know? The other is where UK retailers are doing the importing and claim to have a clever tax dodge that enables them to sell for too-good-to-be-true prices. Without actually seeing their books, who's to say what they're actually doing?

And this throws up a personal dilemma for me - why should I be worried about the 'moral' aspects of grey importing when those with their hands on the tiller can't be arsed?

Easy. Concentrate on the legal issue and the moral one goes away.

 

[StewartR]

I guess it's no different to buying something when you are abroad. If I found and bought a camera cheaper somewhere, I wouldn't feel compelled to tell customs at Heathrow when I got back. I don't think that makes me a crook.

However, whatever you think, technically it does make you a crook.

 

[ianp5a]

It's my private camera. It's now a used one. I am not an importer or trader. If I leave the UK I wouldn't get the VAT back. If I travel through several countries I would not expect to pay each local tax.

 

[HoppyUK]

I think you're right. Even if they could stop the grey market - and I don't think it's as easy as you imply, but that's a different issue - why should they care whether a camera sold in HK ends up being used in HK or UK?

Because they have a responsibility to their UK operations, most wholly-owned subsidiaries. Or the factories could at least do the decent thing and refund them the cost of handling grey warranty work.

I think the problem here is that there's no real evidence for HMRC to work with.

There are two types of grey market operation. The first is when consumers buy direct from (say) HK and are liable for the taxes, but don't volunteer to pay them. Who's ever going to know?

A few well-publicised fines and confiscations, with news of a clamp-down, would put the brakes on grey importing. Easily done IMHO.

The other is where UK retailers are doing the importing and claim to have a clever tax dodge that enables them to sell for too-good-to-be-true prices. Without actually seeing their books, who's to say what they're actually doing?

A lot of smoke and mirrors here. I think we both suspect that all is not what it seems here

Easy. Concentrate on the legal issue and the moral one goes away.

Not so easy. What's legally right and what's morally right are not the same thing at all!

 

[Llamaman]

And this throws up a personal dilemma for me - why should I be worried about the 'moral' aspects of grey importing when those with their hands on the tiller can't be arsed?

Quite. The local council failed to put speed bumps near the local school which compels me to floor it whenever I go past...

The only person responsible for your moral choices is you.

 

[tdodd]

There is nothing stopping a UK personal importer declaring the full value, paying the tax and reclaiming from the supplier where promises of such refunds are included in the deal. Customer gets bargain. HMRC gets tax due. Where is the moral dilemma?

There is no doubt in my mind that UK launch prices for some of this kit are grossly inflated. The original 7D launched at the full price of £1699 at many retailers. Within only a few weeks (maybe 4) it was down to £1499 at Jessops and two weeks after that it was down to £1299. I bought mine with Quidco cash back for a net figure of £1167 within two months of launch. With prices dropping that fast in the official market there must be one hell of a mark up to begin with and plenty of profit to be extracted from the impatient up front. So, if a major UK retailer can sell a £1699 camera for £1167 it seems to me that a grey importer has the possibility to sell for rather less than that, with or without taxes included.

EDIT : And I just noticed Amazon selling the 7D for £625, which raises the question about the wholesale price and whether or how much it has dropped over the last five years. I can only imagine there are some very fat profits to be had with new product releases, with ample room for cost cutters to legitimately add considerable value for customers.