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JaggingUK

UK Customers can't be sent games by Atariage anymore / European maybe next

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This is not a complaint about Atariage as if I was a small business I would not be wanting to do all the extra paperwork...

 

I noticed Atariage not posting games out to the UK as of 1st January due to VAT reasons (looks like VAT/Tax money has to be taken from point of purchase then passed on to UK governement which I bet is a real nuisance doing all the paperwork for a smaller business) and it looks like Europe starting something similar in June/July so Atariage may be stopping posting there too (if order not made before the deadline date)... I did notice on ebay recently I sold an old microphone to someone in America in January and an extra sales tax had been added to the buyers bill and I have looked at buying items from USA and VAT/Tax is now taken at the point of sale then handed on to the UK government... This makes me wish for the good old days of 'will it or won't it' get through customs without a bill - and it also makes me think twice about any purchase on ebay I now make from the USA and I bet it makes American people think twice about any purchase from the UK when tax is added at the point of sale instead of the lottery of a parcel coming in that might not be charged.

 

Does the likes of Etsy charge these same sales tax as ebay?

 

 

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I was looking at some old computer yesterday on UK's ebay, the price was 200 GBP, and the "import charges" to Europe another 50 GBP. It's ridiculous. I'm glad I got most of what I wanted before covid and this new tax BS.

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Has this not always been the case with goods from the US ?

 

I don't remember the EU having a free trade agreement with US that made imports VAT exempt and I know for a fact that my company has always paid VAT and handling on imports from the US and that nothing has changed in that regard.

 

Perhaps i'm missing something ?

 

Is this more a case that HMRC and Customs have got a bee in their bonnet and are picking everything up now whereas before they turned a blind eye as most low value items were imported as 'gifts' or 'samples' - i know that's how my airgun compressor was sent from china to 'avoid' duties and VATand the seller was quite clear that if found out a hefty tax bill may turn up at a later date.

 

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I will eventually have a solution for this, as I don't intend on abandoning those in the UK or Europe.  For the UK, this means I need to register for VAT, collect VAT on orders of £135 or less, include VAT information on the receipt, and remit VAT periodically to HMRC.  You also have to maintain records for a number of years, and if you make any mistakes you can be heavily fined.  It's potentially a lot of work and many small businesses are going to be hit hard by it.  I know similar rules are going into effect on July 1st for the EU, but not sure if they are as onerous as the UK requirements and if the rules will vary at all based on destination country in the EU. 

 

Another solution is setting up a distributor in the UK, which is something else I am exploring.  But that would be a lot of work up front, as I'd need to build and ship a good deal of inventory to the UK first. 

 

I could potentially just require sales to the UK of > £135 (right now about $188 USD), which are handled by customs the same way they were before.  However, the current store software I'm using has no way to setup a minimum purchase threshold of this nature to just a single country.  I could possibly modify the store software to enforce a minimum order value to the UK, but I may not even be able to do that easily until I move the store to new software (which is something I am working on, but it's going to be months before I can finish that).

 

 ..Al

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Oh, regarding eBay and Etsy.  As they are "marketplace" businesses, they are responsible for collecting and remitting the UK VAT.  So I can continue to sell on those services without issue, and I will continue to add games to those platforms over time.  So that's certainly an alternative, but there are some limitations, such as not being able to offer pre-order games.  And eBay has a 10% final value fee on video games, which I compensate for by charging more for games on eBay versus the AtariAge Store. 

 

 ..Al

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7 hours ago, JaggingUK said:

I did notice on ebay recently I sold an old microphone to someone in America in January and an extra sales tax had been added to the buyers bill and I have looked at buying items from USA and VAT/Tax is now taken at the point of sale then handed on to the UK government...

VAT used to not be charged on orders leaving the UK that weren't destined for the EU.  I'm assuming that Brexit changed this?

 

HMRC are setting themselves up for some nasty culpability down the road.  They simply don't have any authority to charge VAT outside of the UK - this is what customs fees and duties are for on imports, and exports should be exempted, IIRC.  Can't see this going well for them.

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4 hours ago, Albert said:

I will eventually have a solution for this, as I don't intend on abandoning those in the UK or Europe.  For the UK, this means I need to register for VAT, collect VAT on orders of £135 or less, include VAT information on the receipt, and remit VAT periodically to HMRC.  You also have to maintain records for a number of years, and if you make any mistakes you can be heavily fined.  It's potentially a lot of work and many small businesses are going to be hit hard by it.  I know similar rules are going into effect on July 1st for the EU, but not sure if they are as onerous as the UK requirements and if the rules will vary at all based on destination country in the EU. 

 

Another solution is setting up a distributor in the UK, which is something else I am exploring.  But that would be a lot of work up front, as I'd need to build and ship a good deal of inventory to the UK first. 

 

I could potentially just require sales to the UK of > £135 (right now about $188 USD), which are handled by customs the same way they were before.  However, the current store software I'm using has no way to setup a minimum purchase threshold of this nature to just a single country.  I could possibly modify the store software to enforce a minimum order value to the UK, but I may not even be able to do that easily until I move the store to new software (which is something I am working on, but it's going to be months before I can finish that).

 

 ..Al

Lotharek is also after a distributor in the UK, contact him perhaps both your busnesses are enough turnover for someone to take up the gauntlet

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5 hours ago, saboteur said:

 

Is this more a case that HMRC and Customs have got a bee in their bonnet and are picking everything up now whereas before they turned a blind eye as most low value items were imported as 'gifts' or 'samples' - i know that's how my airgun compressor was sent from china to 'avoid' duties and VATand the seller was quite clear that if found out a hefty tax bill may turn up at a later date.

No it's now more the fact that they are making us pay VAT up front so the old 'gift' thing or customs not checking them is no longer the case as we as buyers are being made to pay the VAT up front on any purchase from USA - then all that money is stored up (by the likes of paypal) and then sent to HMRC so now when you buy anything at all from the likes of ebay you get charged the price, the postage, plus customs fees/vat all at once. So take for example (just looking now) a Jaguar game on ebay in USA at $150 - postage is $29 - import fees - $42 charged when you buy it... or a cheaper game at $50 - postage is $23 - import fee - $19 and all to be paid up front when you buy and added to the cost of your purchase which add a big chunk of money to any purchase from USA to UK.

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4 minutes ago, JaggingUK said:

No it's now more the fact that they are making us pay VAT up front so the old 'gift' thing or customs not checking them is no longer the case as we as buyers are being made to pay the VAT up front on any purchase from USA - then all that money is stored up (by the likes of paypal) and then sent to HMRC so now when you buy anything at all from the likes of ebay you get charged the price, the postage, plus customs fees/vat all at once. So take for example (just looking now) a Jaguar game on ebay in USA at $150 - postage is $29 - import fees - $42 charged when you buy it... or a cheaper game at $50 - postage is $23 - import fee - $19 and all to be paid up front when you buy and added to the cost of your purchase which add a big chunk of money to any purchase from USA to UK.

Yep, this is correct and is what eBay and Etsy are doing, as well as any other similar "marketplace" websites.  I'm glad they are doing this, as it provides an easy avenue for sellers such as myself to continue to offer some games to UK customers, at least until I have a solution for the AtariAge Store. 

 

 ..Al

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Hi Albert, over here in the UK every two weeks most sellers get a £1 selling fee offer so any item we sell does not get a 10% fee attached but a £1 max fee for selling but I guess that's probably not the same for business sellers. The £1 selling fee is great for getting rid of more expensive items that have been cluttering up the house or garage... Does etsy charge 10% as well for selling or are there fees cheaper?... At least you still have ebay and etsy to sell on to UK and Europe (once Europe changes in June/July)

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Just now, JaggingUK said:

Hi Albert, over here in the UK every two weeks most sellers get a £1 selling fee offer so any item we sell does not get a 10% fee attached but a £1 max fee for selling but I guess that's probably not the same for business sellers. The £1 selling fee is great for getting rid of more expensive items that have been cluttering up the house or garage... Does etsy charge 10% as well for selling or are there fees cheaper?... At least you still have ebay and etsy to sell on to UK and Europe (once Europe changes in June/July)

Yeah, I've never seen any discounts on final value fees, pretty much ever.  eBay also has listing fees, but you can list many items before incurring that fee (I think I can list hundreds of items before I have to worry about that).  Etsy's listing fee is 20 cents, and if you sell an item you pay 5% of the sale price (plus shipping).  So more reasonable than eBay on that front.

 

I really hope I have a solution before July 1st when these changes take effect for the EU!  I still need to research that to learn what I will be forced to do to continue selling to EU customers.

 

 ..Al

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7 minutes ago, Albert said:

I really hope I have a solution before July 1st when these changes take effect for the EU!  I still need to research that to learn what I will be forced to do to continue selling to EU customers.

Have you thought about outsourcing some production to someone in the EU?

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Their is a good chance that later in the year the US & UK may do a trade deal, fingers crossed.

 

Also the UK has applied to join the CPTPP, which is also something the US was going to join, but President Trump put the brakes on it, so maybe that may also change ( i also hear rumblings that China wanted to join ).

 

I assume Albert that you could always get UK orders of the gamedrive shipped direct from here in the UK anyway ? and then also offer digital only versions to avoid all this in the short term.

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45 minutes ago, Thomas Jentzsch said:

Have you thought about outsourcing some production to someone in the EU?

No, I want to maintain control over production to make sure everything is consistent.  If I work with a distributor in the UK and/or EU, I would ship them finished games.  However, I would ship boxes flattened, to reduce shipping volume (since boxed games take a lot of space) as well as help prevent boxes from getting damaged. The boxed games could then be assembled at the destination.

 

 ..Al

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For the near future, eBay and Etsy seem like a tolerable alternative. Thank goodness for that. For now, Americans have not had similar problems... fingers crossed that won’t change.

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10 hours ago, jgkspsx said:

For now, Americans have not had similar problems... fingers crossed that won’t change.

VAT exists globally (116 countries) with a few exceptions (USA, some Arabian and African States...). So when shipping from the USA e.g. to Canada or Mexico you have to pay VAT there. When shipping between two VAT countries, the VAT of the original country gets refunded (or not claimed) and you have to pay VAT in the target state.

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Speaking for Canada, when packages are mailed in from overseas the import duties and taxes are often ignored.

I can't remember the last time I had to pay for a package I've received via Canada Post - several years, anyhow.

 

On the other hand, if someone in another country ships to me via any courier (UPS, Fedex, etc) these private companies love to make sure I pay - and they also make sure to charge a brokerage of $10-$15 on top of that!

I always urge sellers to ship to me with post and tracking, rather than a courier.

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On 2/15/2021 at 8:50 PM, thanatos said:

How can the UK fine a seller in the US?  Can't you just say "Good luck."?

I suppose they could impose a fine and then seize goods from the US seller or "catch" payments directed to him. 

 

11 hours ago, Thomas Jentzsch said:

When shipping between two VAT countries, the VAT of the original country gets refunded (or not claimed) and you have to pay VAT in the target state.

Usually sellers are allowed to ship overseas shipments without charging VAT at all. It's interesting that the UK requires foreign sellers to collect VAT for them. 

 

All this probably has to do with the 25 EUR import duty exemption that IIRC has been or is about to be rescinded as it was misused by (Chinese) sellers declaring all kinds of items to be below that threshold. 

 

On the plus side this might actually make it more attractive to buy smaller shipments as prepaid VAT would eliminate the minimum customs processing fees levied by all carriers which have reached 10-15 € regardless of the value of the shipment.

 

On the minus side, we might be enticed to always hit the 135 GBP minimum when ordering....

 

 

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1 minute ago, slx said:

On the minus side, we might be enticed to always hit the 135 GBP minimum when ordering....

Yeah, I'm likely to modify the store to allow sales to destinations in the UK as long as the minimum order is £135 (which is nearly $190 USD).  At least as a short-term measure.  I'd need to attach a packing slip to the outside of the package, and you'd get charged any VAT and administrative fees when the package enters the UK (similar to how it was before).

 

 ..Al

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1 hour ago, slx said:

Usually sellers are allowed to ship overseas shipments without charging VAT at all. It's interesting that the UK requires foreign sellers to collect VAT for them.

I'm truly not understanding how HMRC thinks it can require VAT registration in territories outside of the UK which are shipping to the UK.  This is the complete opposite of how I've seen it work my entire life, and am concerned that they believe that they have the power to do so.  Of course they can enact whatever they want and simply say, "if you don't like it, tough," and seize or return untaxed shipments.  But UK taxation can't be enforced outside of the UK's borders.  Confusing, to say the least.

 

Oddly enough, there's some bit of historical precendent for this sort of thing not going over well.  Can't remember exactly what it was; perhaps an example may be found in one of the (now ex-) colonies 😜

1 hour ago, slx said:

On the minus side, we might be enticed to always hit the 135 GBP minimum when ordering....

Might not be a bad idea to start organising group buys.  Bump up over the £135 limit and bundle orders for cheaper shipping.  Just a thought...

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