Customs Duty on parts from Italy

[Southdown]

New to Renault 4 ownership.

Recently ordered parts from De Marco in Italy. Subsequently had a Fed Ex Invoice for 'Duty and Tax'.
Is this correct and has anyone else experienced it? It seems as if I am paying Vat twice (Italy and UK)

Parts were approx 270 euros and Duty & Tax Invoice was approx 60 euro in addition.
Has anyone else had this experience?

Many thanks

 

[André4Renaults]

This is how it works:

When the United Kingdom was a member of the European Union good and services traded within the various countries within the Union were not subject any charges over and above those that would be charged on goods and services moving within the same country. Put simply, goods and services from Manchester to London would be subject to the same taxes as goods and services from Milan to London; the vendor in Milan would charge V.A.T. at the appropriate rate (usually 20%) and the buyer would pay it.

The United Kingdom is now NOT in the European Union and therefore goods and services that travel from the European Union to destinations outside (in this case The United Kingdom) are treated as goods EXPORTED. Consequently (and this is the important part...) the vendor will NOT charge V.A.T. on his invoice, as the goods are being exported from the E.U. When these same goods arrive in the U.K. the relevant customs authorities (in the U.K. this is H.M.R.C.) add V.A.T., together with any relevant duties applicable and this charge is passed on to the purchaser. [This is identical to a seller in the United Kingdom selling goods to, say the U.S.A; V.A.T. would NOT be added to the invoice, as the goods are being exported, but would be subject to Sales Tax once in the U.S.A.]

In theory there ought to be no difference (or a very small one) since the V.A.T. at 20% is NOT charged as the goods are exported from the E.U. but is added at 20% as they enter the U.K., resulting in an identical total charge (assuming both V.A.T. rates to be identical). However, many businesses within the E.U. have not altered their systems since our leaving the Union and so still charge V.A.T., as if the goods were still being traded within the Union, hence a possible increase in price.

Thirty-two years working for what was H.M.C.&.E. (H.M. Customs and Excise) and later H.M.R.C. (H.M. Revenue and Customs) at Heathrow Airport, including during the Brexit Transition period meant I dealt with a HUGE number of these inquiries, and I'm SO glad I'm now retired and longer working there!

In the case you quote a charge of 270 EURO would attract VAT at 20%=54 EURO, so it seems about right. The courier or postal authorities may add a charge for administering this.

The above comments are not to be seen as a pro or anti Brexit statement.

 

[retrospecparts]

.......[This is identical to a seller in the United Kingdom selling goods to, say the U.S.A; V.A.T. would NOT be added to the invoice, as the goods are being exported, but would be subject to Sales Tax once in the U.S.A.].....

Nicely explained Andrew.
About 80% of my website sales used to be to the EU. Now that's almost entirely gone since we left because of huge additional costs now, when EU customer buy from me.
Most of my sales were around £20 or less and would fit in "large letter" size. Before brexit, such a £20 order would cost under a fiver to post to mainland Europe, so the total cost to the customer was under £25.
Now the same £20 order still costs the EU customer £20 because I'm not vat registered (It's a small, part time business with around a tenth of the annual turnover threshold).
Due to having to go through customs, average delivery times have more than tripled, so customers now want to be able to track there orders, so postage has nearly doubled, so the previous £25 cost has become £29. On top of that, they have to pay vat on the goods and the postage, so at 20% that takes it to £34.80. Then there's the customs authority's admin charge, which varies enormously between countries and even the same goods, value & country can have different admin charges! This is usually between £4 and £8. Then there's vat on the admin charge. So, if we say an average of £6+vat, that's another £7.20.
This takes the total cost to £41 for the same item that used to cost them £25.
I'm therefore no longer competitive, so 80% of my business has just gone.
I haven't put the price up on my fastest selling items (that I get made locally) for about 10 years because the costs to me stayed fairly constant until we left the EU. Since then the raw materials (imported by the manufacturers, from the EU) have gone up by about 30%.
2cv parts are the main part of my business and there are still many thousands of them in Europe, (mainly France, Germany, Netherlands) but hardly any outside Europe so I can't replace those lost sales elsewhere.
You ended your post Andrew, by saying that your comments were not to be seen as a pro or anti Brexit statement. I think you can guess what my thoughts are about it!

 

[Southdown]

This is how it works:

When the United Kingdom was a member of the European Union good and services traded within the various countries within the Union were not subject any charges over and above those that would be charged on goods and services moving within the same country. Put simply, goods and services from Manchester to London would be subject to the same taxes as goods and services from Milan to London; the vendor in Milan would charge V.A.T. at the appropriate rate (usually 20%) and the buyer would pay it.

The United Kingdom is now NOT in the European Union and therefore goods and services that travel from the European Union to destinations outside (in this case The United Kingdom) are treated as goods EXPORTED. Consequently (and this is the important part...) the vendor will NOT charge V.A.T. on his invoice, as the goods are being exported from the E.U. When these same goods arrive in the U.K. the relevant customs authorities (in the U.K. this is H.M.R.C.) add V.A.T., together with any relevant duties applicable and this charge is passed on to the purchaser. [This is identical to a seller in the United Kingdom selling goods to, say the U.S.A; V.A.T. would NOT be added to the invoice, as the goods are being exported, but would be subject to Sales Tax once in the U.S.A.]

In theory there ought to be no difference (or a very small one) since the V.A.T. at 20% is NOT charged as the goods are exported from the E.U. but is added at 20% as they enter the U.K., resulting in an identical total charge (assuming both V.A.T. rates to be identical). However, many businesses within the E.U. have not altered their systems since our leaving the Union and so still charge V.A.T., as if the goods were still being traded within the Union, hence a possible increase in price.

Thirty-two years working for what was H.M.C.&.E. (H.M. Customs and Excise) and later H.M.R.C. (H.M. Revenue and Customs) at Heathrow Airport, including during the Brexit Transition period meant I dealt with a HUGE number of these inquiries, and I'm SO glad I'm now retired and longer working there!

In the case you quote a charge of 270 EURO would attract VAT at 20%=54 EURO, so it seems about right. The courier or postal authorities may add a charge for administering this.

The above comments are not to be seen as a pro or anti Brexit statement.

Thank you for the replies - very concise.

This is the reply I had from De Marco when I queried it - which seems conflict with what I thought and your replies. They did ask me for my NI number before posting and I said I was a private individual.

If you are a private individual you pay the Italian VAT only. If you are a company, you do not pay Italian VAT, but only that of your country.

I may try Der Francoise next time as they seem to list the ex Vat prices on their website. I have emailed them prior to ordering to check that I won't be charged Vat (as its an export) and await a reply.

Again just trying to find out the facts rather than getting into a Brexit debate.

Previously I have had Morris minors and triumphs which used parts suppliers such as Rimmer Bros (who don't charge Vat on exports) and Ej Ward based in UK.
Now I know the reality I might need to make more repair panels than buying too many.

Thanks again

 

[Southdown]

A quick update on Vat

De Marco are insisting that they charge Italian Vat on exports to UK and wiont refund the 60 euro I have been overcharged.
De Marco said when I requested a refunbd of the Vat :
Absolutely not. If you buy in Italy, you only have to pay Italian VAT and customs duties on delivery.
He must contact his UK customs and ask for explanations because they also made him pay the English VAT.
We don't hit anything, it's a problem for your country. We sell with regular sales invoice all over the world.

Der Francoise on the other hand have confirmed they won't charge German Vat on their orders to the UK.
Der Francoise said:
thank you for your enquiry.
We send without german VAT.
You have only to pay UK customs.

As such I will use Der Francoise in future and not De Marco.
Might help the rest of you..

 

[malcolm]

De Marco are wrong. The system changed with Brexit and the end of the common VAT system. After 2021 we now pay VAT in the UK on imported goods and should not be charged VAT in the source country.

It's all a pain but the European suppliers who have worked it all out will have registered for VAT in the UK and include that in the purchase price so the goods can go through customs without problems. Otherwise the delivery company will charge you the VAT. See https://www.gov.uk/goods-sent-from-abroad/tax-and-duty

 

[André4Renaults]

A quick update on Vat

De Marco are insisting that they charge Italian Vat on exports to UK and wiont refund the 60 euro I have been overcharged.
De Marco said when I requested a refunbd of the Vat :
Absolutely not. If you buy in Italy, you only have to pay Italian VAT and customs duties on delivery.
He must contact his UK customs and ask for explanations because they also made him pay the English VAT.
We don't hit anything, it's a problem for your country. We sell with regular sales invoice all over the world.

Der Francoise on the other hand have confirmed they won't charge German Vat on their orders to the UK.
Der Francoise said:
thank you for your enquiry.
We send without german VAT.
You have only to pay UK customs.

As such I will use Der Francoise in future and not De Marco.
Might help the rest of you..

The German company has it correctly organised (an example of German efficiency!) and the Italian one does NOT. As the German site says, they export goods from the E.U. without V.A.T., which is then added by the U.K. Customs at this end. The Italians seem to have it back-to-front (I was going to use another phase there, but discretion prevents...) since the U.K. authorities are unable (and are not permitted) to collect or pass on customs charges or VAT on behalf of the Italian authorities, since we are not in a customs union with the E.U.

As has been said, no-one wants this to become a Brexit/Remain debate, and it's fair to say there's been a steep learning curve for both companies and Customs Officers in getting to grips with things. That said, the principles involved are actually quite simple; If the company in the E.U. treat exports to the U.K. in the same way as they treat exports to, say, Australia (right hand drive cars, speak English, Commonwealth member) then things will be fine.

 

[André4Renaults]

I should add that since Brexit I've imported parts from Dafhobby in The Netherlands (for my Daf 33), Pragos in The Czech Republic and Skopart24 in Germany (both for my 1961 Skoda Octavia Super), all without any problems and with extremely quick delivery times. The only funny thing was a remark, in English, hand-written on the paperwork from Pragos, commenting to the effect that the Czech Republic had only recently joined the E.U., just as the United Kingdom had left!

 

[Homegrown]

We who still are in the EU can chose where you want the VAT to be paid. In sweden we have 25% most other countries have lower then i choose to pay their VAT instead of Sweden tax.
Historically I bought a lot of stuff from UK but now is DemonTweaks the only company to my knowledge that’s easy to buy from (they have swedish dilivered to door prices directly on their website).
Used to buy parts from Alfaholics, Camskills etc etc.

 

[André4Renaults]

If Sweden to leave the E.U., would that be called "Sexit"......? Sorry!

 

[Southdown]

The German company has it correctly organised (an example of German efficiency!) and the Italian one does NOT. As the German site says, they export goods from the E.U. without V.A.T., which is then added by the U.K. Customs at this end. The Italians seem to have it back-to-front (I was going to use another phase there, but discretion prevents...) since the U.K. authorities are unable (and are not permitted) to collect or pass on customs charges or VAT on behalf of the Italian authorities, since we are not in a customs union with the E.U.

As has been said, no-one wants this to become a Brexit/Remain debate, and it's fair to say there's been a steep learning curve for both companies and Customs Officers in getting to grips with things. That said, the principles involved are actually quite simple; If the company in the E.U. treat exports to the U.K. in the same way as they treat exports to, say, Australia (right hand drive cars, speak English, Commonwealth member) then things will be fine.

The Italian Vat has now been refunded by De marco and I have paid the UK customs duty - a lot happier now. Thank you everyone for your help with this.

 

[Cornish4]

Hi, I just bought a pair of rather snazzy drilled and slotted brake discs for the GTL from De Marco Parts, and no problem with customs charges. So I can only assume De Marcos have nipped this in the bud. I'm very pleased with their service and the product.

 

[André4Renaults]

One presumes you also paid Cornish Import Tax as the items passed over the Tamar..... LOL!

 

[Cornish4]

Oh yes me ansum, of course