Community Stories

How does payment of VAT/tax work in the UK on a watch imported from US?

amikoyan
Posts
131
Likes
466
I have a watch imported from the US which is currently in international transit en route to London. I think that the delivery has been handled so far by the USPS.

What happens when it arrives in London? Could any fellow UK members tell me how import tax/ VAT is paid in these circumstances? Will HMRC contact me? If so how are they likely to do it? The value of the watch is sufficient that VAT will be owed.
 
Davidt
Posts
13,199
Likes
22,953
Usually the courier will collect on behalf of HMRC. The amount of duties due are dependent on the declared value so assuming the seller has declared full value, expect to pay 20% plus handling fees. With FedEx, DHL, Royal Mail, you’ll get a notification for payment and the package won’t be delivered until you’ve paid.
 
Matt-998
Posts
55
Likes
166
This was explained to me when sending a package to the UK. Lets say the parcel item was valued at £1,000 that was the sale price - I received £1,000 from the UK buyer.I had to pay the VAT before the courier would accept it.

Example numbers:

So instead of paying 20 % VAT on top of the sale value - say £1,000 x 20% = £200 VAT to pay. I said the sale value of £1,000 includes the VAT that I was required to pay.

So I paid £167 VAT. The value of the watch of £833 + £167 VAT @ 20 % = £1,000 purchase/sale price.

That was explained to me when sending the package. The VAT was included in the £1,000 and was not calculated on top of the £1,000 - if that makes sense.
 
Davidt
Posts
13,199
Likes
22,953
I buy watches from all over the world quite often and I’ve never ever heard of that.
Are you talking about shipping within the UK or shipping to the UK from another country?

Every single time I’ve bought a watch from the US, EU (post Brexit) or Aus, the seller has to do nothing with regards to import duties, they just ship and the courier accepts. Import duty is all ok the buyer to pay before delivery.
 
YY77
Posts
5,986
Likes
28,631
Davidt Davidt
I buy watches from all over the world quite often and I’ve never ever heard of that.
Are you talking about shipping within the UK or shipping to the UK from another country?

Every single time I’ve bought a watch from the US, EU (post Brexit) or Aus, the seller has to do nothing with regards to import duties, they just ship and the courier accepts. Import duty is all ok the buyer to pay before delivery.
+1 the country of the buyer want to collect their taxes so will always require it on top of the declared amount, whether VAT in the sending country (within EU excluded) was charged or not doesn't matter.
 
Davidt
Posts
13,199
Likes
22,953
YY77 YY77
+1 the country of the buyer want to collect their taxes so will always require it on top of the declared amount, whether VAT in the sending country was charged or not doesn't matter.

Exactly. Unless the sender is a commercial entity and has some agreement to collect taxes for th destination country, duties must be collected on arrival in the destination country and be paid by the buyer.
 
Matt-998
Posts
55
Likes
166
Davidt Davidt
I buy watches from all over the world quite often and I’ve never ever heard of that.
Are you talking about shipping within the UK or shipping to the UK from another country?

Every single time I’ve bought a watch from the US, EU (post Brexit) or Aus, the seller has to do nothing with regards to import duties, they just ship and the courier accepts. Import duty is all ok the buyer to pay before delivery.
Sending from the Channel Islands to the UK. The Channel Islands collect the tax on behalf of the UK - which is probably different to other countries. From the Channel Islands the seller to the UK gets asked to pay the VAT before the courier / post office will accept it.

My point is about calculating the VAT amount.If a watch arrives in the UK from the US, for which you have paid £1,000 - you calculate that the £1,000 includes the VAT - so the watch is actually valued at £833 and the VAT that you pay will be £167.

The point is that if a package arrives valued at £1,000 and someone is asking you to pay 20% on top of that - you say that the value is £1,000 including VAT - and pay £167 instead of £200.
 
cristos71
Posts
7,901
Likes
35,852
Matt-998 Matt-998
The point is that if a package arrives valued at £1,000 and someone is asking you to pay 20% on top of that - you say that the value is £1,000 including VAT - and pay £167 instead of £200.

Good luck wirh that! Here in NL declared value is declared value and the Dutch authorities are not interested in having a discussion abiut whether or not that value is including VAT...as it certainly isn't including their VAT and that's the only one they care about.
 
Davidt
Posts
13,199
Likes
22,953
Matt-998 Matt-998
Sending from the Channel Islands to the UK. The Channel Islands collect the tax on behalf of the UK - which is probably different to other countries. From the Channel Islands the seller to the UK gets asked to pay the VAT before the courier / post office will accept it.

My point is about calculating the VAT amount.If a watch arrives in the UK from the US, for which you have paid £1,000 - you calculate that the £1,000 includes the VAT - so the watch is actually valued at £833 and the VAT that you pay will be £167.

The point is that if a package arrives valued at £1,000 and someone is asking you to pay 20% on top of that - you say that the value is £1,000 including VAT - and pay £167 instead of £200.

I can see how it may be different from the channel
Islands but what you’re saying re VAT won’t work. All HMRC want to know is the purchase price, and you’re paying import duties on all of it.
 
Matt-998
Posts
55
Likes
166
Davidt Davidt
I can see how it may be different from the channel
Islands but what you’re saying re VAT won’t work. All HMRC want to know is the purchase price, and you’re paying import duties on all of it.

I have sold random things to the UK, from the Channel Islands. I prepare a little invoice. The £1,000 example I would put the value of the item as £833 plus £167 VAT - received with thanks TOTAL : £1,000.

The buyer does not care. They paid a £1,000 and get their item. I have to pay £167 tax.

The purchase price is therefore £833 and the £167 is tax that you pay on to HMRC.
 
gatorcpa
Posts
13,309
Likes
18,419
Matt-998 Matt-998
My point is about calculating the VAT amount.If a watch arrives in the UK from the US, for which you have paid £1,000 - you calculate that the £1,000 includes the VAT - so the watch is actually valued at £833 and the VAT that you pay will be £167.
The above sounds absurd to me, since we do not have VAT in the US. You should not have been charged US sales tax since your watch was being exported, even on platforms that normally charge it like eBay.

So the £1,000 you paid should not have included any taxes.
gatorcpa
 
Matt-998
Posts
55
Likes
166
gatorcpa gatorcpa
The above sounds absurd to me, since we do not have VAT in the US. You should not have been charged US sales tax since your watch was being exported, even on platforms that normally charge it like eBay.

So the £1,000 you paid should not have included any taxes.
gatorcpa
We may be talking about different "Channel Islands " I know there are Channel Islands in the US as well........

Jersey, Guernsey, Sark, Alderney and a few smaller ones.....
1740777148360.webp
 
Davidt
Posts
13,199
Likes
22,953
Matt-998 Matt-998
I have sold random things to the UK, from the Channel Islands. I prepare a little invoice. The £1,000 example I would put the value of the item as £833 plus £167 VAT - received with thanks TOTAL : £1,000.

The buyer does not care. They paid a £1,000 and get their item. I have to pay £167 tax.

The purchase price is therefore £833 and the £167 is tax that you pay on to HMRC.


As I said, I can see how it may be slightly different from the Channel Islands as they’re a UK dependency but what you are describing won’t happen when buying and importing to the UK from 99% of countries.
 
Matt-998
Posts
55
Likes
166
Davidt Davidt
As I said, I can see how it may be slightly different from the Channel Islands as they’re a UK dependency but what you are describing won’t happen when buying and importing to the UK from 99% of countries.

OK.
 
gatorcpa
Posts
13,309
Likes
18,419
Matt-998 Matt-998
Jersey, Guernsey, Sark, Alderney and a few smaller ones.
Of course, you are correct about CI. However, the OP was exporting from the US, not the Channel Islands (of which I am never sure if they are considered part of the UK for tax purposes or not).

We have no national VAT, GST or sales taxes in the US. State and local sales (or use) tax only should apply to items imported into their state of residence, whether from another state or country. Therefore, there should be no element of taxes in the declared value for export.

If the OP was charged sales tax on an exported purchase, then either he purchased the item through a freight forwarder (who may have been charged tax), or he needs to open a case with eBay or his seller. Most legitimate freight forwarders have the proper licensing to avoid US sales taxes anyway.

Hope this helps,
gatorcpa
 
Matt-998
Posts
55
Likes
166
gatorcpa gatorcpa
Of course, you are correct about CI. However, the OP was exporting from the US, not the Channel Islands (of which I am never sure if they are considered part of the UK for tax purposes or not).

We have no national VAT, GST or sales taxes in the US. State and local sales (or use) tax only should apply to items imported into their state of residence, whether from another state or country. Therefore, there should be no element of taxes in the declared value for export.

If the OP was charged sales tax on an exported purchase, then either he purchased the item through a freight forwarder (who may have been charged tax), or he needs to open a case with eBay or his seller. Most legitimate freight forwarders have the proper licensing to avoid US sales taxes anyway.

Hope this helps,
gatorcpa

This is very interesting actually.

From my experience, exporting to the UK from CI, the VAT is my problem. Because the parcel will not go on the plane unless I pay the VAT upfront. Therefore it is my problem as the sender.

The recipient in the UK can show my invoice and say - look the VAT has been paid - which it will have been - in all legal respects. Not their problem. The package will have on it that it is VAT paid - not the recipients problem.

If I was to send something from CI to Japan - the Japanese import taxes would not be my problem, they would be the buyer's problem. They would receive a package valued at XXX and they would have to sort out their own taxes - their problem, not mine.

I think that is the difference. From Channel Islands I am being asked to pay the taxes for the UK - so that is how it is done, with that formula.

I hope I have not confused things too much.
 
tikkathree
Posts
1,434
Likes
6,513
Davidt Davidt
I buy watches from all over the world quite often and I’ve never ever heard of that.
Are you talking about shipping within the UK or shipping to the UK from another country?

Every single time I’ve bought a watch from the US, EU (post Brexit) or Aus, the seller has to do nothing with regards to import duties, they just ship and the courier accepts. Import duty is all ok the buyer to pay before delivery.
That's Import Duty on the declared value plus any "Handling Charges" levied by the delivering courier company.

And don't be surprised if the declared cost of postage is added to the value on which everything is calculated. I'd love to evidence this with a real-life recent example but tbh I've rather given up on importing pre-owned from pretty much everywhere.
 
rob#1
Posts
2,011
Likes
3,396
This is something that seems to have changed a bit over the years. Last year I sent some gifts from Australia to the UK and had to declare what everything was with its value before it could be posted. At London the recipient was tracking the parcel and a couple of days after it was ‘out for delivery’ they received an email informing them that they had to pay a hefty import / VAT amount before it would be allowed through.
In previous years I’d just chuck stuff in a box, pay the postage and forget about it. As with everything these days everyone wants their cut 🤨
 
5 More Posts...
Sign up or log in to reply...

Similar threads

arcadelt

Have you ever thought about minimising the tax on a watch purchase?

arcadelt Open Discussion
Taddyangle
Taddyangle
Posts
47
Views
5K