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JaggingUK

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

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On 2/15/2021 at 10:06 AM, JaggingUK said:

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)... 

This is possibly the worst decision the UK government could have made for post-brexit handling of imports as it'll end all small scale importing to the UK. It's poorly thought out which to be fair is just our politicians being our politicians...

 

My worry is the huge order I placed last year with AA (via @marauder666 we already combine our orders to share the already extortionate import fees)... I'm checking with Cleggy now that it's over $188 (it should be to be fair, I'm fairly certain it clears it by a lot).  EDIT: *wipes brow* we've doubled it pretty much, it's that long ago I'd forgotten what was on it.

Edited by juansolo
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Lotharek now has a UK distributer, https://retrolemon.co.uk/.  I believe they will also be handling the AVG cart soon, so that might be a possibility for AtariAge products.

 

In the meantime, I think a minimum order on the website or using EBay are the best alternatives.

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2 hours ago, juansolo said:

My worry is the huge order I placed last year with AA (via @marauder666 we already combine our orders to share the already extortionate import fees)... I'm checking with Cleggy now that it's over $188 (it should be to be fair, I'm fairly certain it clears it by a lot).  EDIT: *wipes brow* we've doubled it pretty much, it's that long ago I'd forgotten what was on it.

Orders placed before January 1st are fine, regardless of the amount. 
 

  ..Al

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1 hour ago, Albert said:

Orders placed before January 1st are fine, regardless of the amount. 

How long can you pretend working on a huge backlog? ;) 

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UK buying from Europe since Brexit:

 

Under the new rules, anyone in the UK receiving a gift from the EU worth more than £39 may now face a bill for import VAT - with many items charged at 20%.

For goods costing more than £135, customs duties may also apply, which can range from 0% to 25% of the product you're buying if they have not been paid by the sender already.

 

So if buying from Europe you need the item sent as a gift and with a value on customs form of under £39 (and not sure if that includes the postage price too) so better to pop a price of £15 - £20 just to be safe as I can't remember if price of postage falls into that £39.

 

Now if buying from further afield:

 

The HMRC paper, “Changes to VAT treatment of overseas goods sold to customers from 1 January 2021,” also states that all international sellers will be responsible for charging and collecting the UK VAT on all items under £135.

That means overseas sellers will be required to register and account for the VAT to HMRC unless they use an online marketplace.

If they do sell through a marketplace, for example Amazon or eBay, the marketplace will be responsible for collecting and accounting for the VAT.

David added: “To compound the problem, Amazon is also insisting that from 1 January,  EU and international sellers such as American or Chinese merchants selling items to both British and EU shoppers will have to split their stock and hold some in Amazon’s UK warehouses. That involves significant new transport costs and red tape for overseas sellers.”

The costs involved in these changes may well reduce the choice and increase the cost of items available to UK buyers in the future

The international home delivery experts also warns that overseas sellers from the EU, USA and China may decide that the extra charges and bureaucracy involved in selling to UK consumers is not worth the candle.

“Brits have been buying increasing amounts of goods online from EU and international sellers as the coronavirus pandemic continues to make shopping in centres and crowded stores a worrying prospect. We believe British consumers will be facing higher costs and less choice from January, as the impact of Brexit starts to bite,” David added.

 

 

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Now why the hell any small international seller/business would bother signing up for this is beyond me. Why on earth would some non UK/European business bother doing paperwork and then collecting VAT for a foreign government. I really think this is so foolish and will only result in lots of companies not selling directly to the UK - not quite sure what was wrong with the old customs form and someone works out the price when it gets here and you pay it at your doorstep... Seems like the British government are being lazy and just asking other people in other countries to do their jobs for them... Less work for the people in the customs warehouses to do so they can eventually lose their jobs as everything is taxed at the point of purchase and some poor schmuck with a small business in another country has to collect money for the UK government... Makes me think the UK powers think they are still running an empire and not the small country we now are. 

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It's unfortunate that this is happening to you guys. I won't go into detail for the obvious reasons why that's not allowed here. But if you don't want these taxes, then you should speak to your elected representatives and let them know. If YOU don't make your voices heard, then only the special interests will be heard.

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3 hours ago, JaggingUK said:

Now why the hell any small international seller/business would bother signing up for this is beyond me. Why on earth would some non UK/European business bother doing paperwork and then collecting VAT for a foreign government. I really think this is so foolish and will only result in lots of companies not selling directly to the UK - not quite sure what was wrong with the old customs form and someone works out the price when it gets here and you pay it at your doorstep... Seems like the British government are being lazy and just asking other people in other countries to do their jobs for them... Less work for the people in the customs warehouses to do so they can eventually lose their jobs as everything is taxed at the point of purchase and some poor schmuck with a small business in another country has to collect money for the UK government... Makes me think the UK powers think they are still running an empire and not the small country we now are. 

Nailed on on every count. Why any small operations would sign up for that is beyond me, I certainly wouldn't. It amuses me sometimes how you get the impression that our politicians still think we're a big deal and are relevant. We're really not, and they seem to be doing everything they can to make sure it stays that way.

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19 hours ago, JaggingUK said:
So if buying from Europe you need the item sent as a gift and with a value on customs form of under £39 (and not sure if that includes the postage price too) so better to pop a price of £15 - £20 just to be safe as I can't remember if price of postage falls into that £39.

It has done in the past so I expect it still would. I suppose we can be thankful that the limit has been raised from £15 to £39, but it's hardly much. The £15 was to stop us importing US DVDs early on when we were very much the poor cousin when it came to releases. Like so many things, the amount stuck and was not revisited until now. I'm not even sure you can post much from the US now for less than £15 postage before you get to the item's value.

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I believe it was Mat Allen who previously looked up that for the EU, collecting VAT in advance will be recommended but not mandatory, meaning that if you keep selling to that region after July 1 but don't collect VAT, the recipient will have to pay it themselves + handling fees which of course will annoy customers as those handling fees can be in the range of $10-20 per package depending on destination country. On the other hand you would not have to invest in paperwork and procedures, or increase your prices to cover for your extra work if you leave it to the customer. For the UK the situation is different, though it has been mentioned previously in other threads how on Earth the UK authorities can have jurisdiction overseas unless they have some agreement with e.g. US authorities of course and the penalties are issued through them.

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Obviously it is not only AtariAge that is affected by this. With so many smaller, independent vendors facing the same issues, I wonder if it would be administratively and technically possible to combine many of those stores in an own network, perhaps call it "Retrotsy" where you set up your own rules for joining and how handling should happen, instead of having to live with the terms of eBay or Etsy (and not having to pay more than the actual costs of handling the VAT collection and payout). But perhaps you would need to form a new company together, all retro game vendors and somehow transfer goods into that company in order to legally administrate it instead of everyone are doing it on their own?

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Lets be fair taxes have always been applied to imports, when the UK were in the EU the seller added taxes at their local rate, and those taxes were collected in their local jurisdiction and then reclaimed by your respective government.

 

I'll also note that shipping as a gift has the potential to get you a hefty tax bill and either you or the seller a potential fine and criminal proceedings for lying to an official ( in writing no less ) - but this has always been the case.

 

To be honest, it's not the tax that really bothers me, it's the extra handling and paperwork charges that really get my goat, because from what i can see, carriers are doing little that justifies ( in some cases ) hefty charges that they are applying which is then further bumping up the VAT cost to the end user, who unlike them is most likely not VAT registered and unable to recover that cost.

 

I'd be interested in knowing what the tax is and how its applied to items imported in the US ? Do Federal, state and county get a slice or do they apply their own unless it 'slips through'

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1 hour ago, saboteur said:

Lets be fair taxes have always been applied to imports, when the UK were in the EU the seller added taxes at their local rate, and those taxes were collected in their local jurisdiction and then reclaimed by your respective government.

Right, but pre-EU (which is effectively where Brexit has left the UK) VAT wasn't supposed to be charged on items being exported from the UK.  For items being imported, HM Customs didn't care about whether or not taxes had been paid on the item at its origin; they just slapped VAT onto it, added their fees and duties, and then added VAT a second time to get the final value.

 

Used to go through this constantly when shipping from the UK to Ireland or vice-versa prior to 1992.  It was not a smooth process then, and by all accounts they've found a way to make it even worse now.

1 hour ago, saboteur said:

I'll also note that shipping as a gift has the potential to get you a hefty tax bill and either you or the seller a potential fine and criminal proceedings for lying to an official ( in writing no less ) - but this has always been the case.

True, but good luck to HMRC with enforcing that outside of the UK.  Unless there's literally millions in fraud taking place with a single shipper, it's not worth their time or effort (or likely to get anywhere with foreign authorities).

1 hour ago, saboteur said:

To be honest, it's not the tax that really bothers me, it's the extra handling and paperwork charges that really get my goat, because from what i can see, carriers are doing little that justifies ( in some cases ) hefty charges that they are applying which is then further bumping up the VAT cost to the end user, who unlike them is most likely not VAT registered and unable to recover that cost.

Which is a very good point.  It would also mean that a one-man-shop could conceivably have to register for VAT in any country they sell to if other countries start following the UK's lead.  No small business is going to do that; it's just easier for them to say, "sorry, we don't ship to your country."

1 hour ago, saboteur said:

I'd be interested in knowing what the tax is and how its applied to items imported in the US ? Do Federal, state and county get a slice or do they apply their own unless it 'slips through'

Essentially, there are four levels of taxation in the US: Federal, State, county, and local (city).  Sales taxes are not applied at the Federal level, only State and below.  A few States have no sales tax, and some cities have no local taxes; it's not completely uniform throughout the country and rates do vary from State to State, county to county, and locale to locale.

 

Sales taxes aren't typically levied when an item is imported or manufactured, but rather when it is first sold.  At that point, the taxes are collected by the relevant agencies in whatever proportions they take of the tax as a whole.

 

With imports, there are customs fees and duties that are Federally-levied.  Those go straight to Customs & Border Protection (a Federal agency), who subsequently return it to the Federal government.  Typically, there would be no further taxation on the item beyond this point unless it fell into certain categories (cars and alcohol being the best examples I can think of).

 

Obviously, there's a lot in there that's been over-simplified, but it should get the gist across.  It may sound confusing but in day-to-day life it's really not much of an issue.  About the only thing that annoys me about it (apart from having to pay the taxes) is that retail prices of goods on shelves in the US are typically shown without the sales tax added, so you have to mentally recalculate the price to reflect how much you're actually paying.

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It could also be noted that if you have an own business and purchase games through it, you can deduct incoming VAT from the outgoing VAT you charge on the items or services you are selling through your own business. Even if you happen to have no operations in your business, you can generally deduct incoming VAT from 0 and recoup that part. Indeed it is a shady thing to do, and the games won't be part of your collection, those will be part of your business' collection. However as long as you operate in small scale, most tax offices won't find out in the automated process. Also if you live in a country where having an auditor is optional, nobody will ever know unless the tax office decides to audit your business. You only declare the totals on each account in your bookkeeping at the end of the year...

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4 minutes ago, x=usr(1536) said:

Sales taxes aren't typically levied when an item is imported or manufactured, but rather when it is first sold. 

Good point. It has been discussed over here if businesses selling second hand items - whether those are clothes, books, electronics, tableware or anything else - should charge and handle VAT, or if the added value of reusing items multiple times and that profits usually go to charitable causes are enough to exempt them from VAT handling. As I indicated above, for a company the VAT to most part is a zero sum game, it is the consumer in the end who pays.

6 minutes ago, x=usr(1536) said:

With imports, there are customs fees and duties that are Federally-levied.

Do you really have customs fees on most goods? From what I know, over here actual customs are only charged for clothing, possibly food. Things like toys and electronics had 0% customs last time I checked, only import VAT. Many people mix customs fees and VAT, and while both may be charged at the same time, they're two different things.

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I don't know what the actual rules are, but I have never been charged a customs fee for anything I have ever received from overseas.  If it has been dumb luck, I hope it continues...  ;)

 

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48 minutes ago, carlsson said:

Do you really have customs fees on most goods?

In theory, any item imported into the US is eligible to be dutied unless specifically exempted.  In practice, CBP tends to concentrate its efforts more on high-value items (cars) or ones where smuggling is profitable (alcohol, tobacco).

 

As an example: a couple of years ago, my Jeep needed a new thermostat.  I ended up having a custom one made in Canada, paid CAN$400 (about US$320 at the time) for it, and awaited its arrival.  What I received was a note on my door from UPS telling me that there were nearly $200 in processing fees as well as customs duties to be paid if I wanted my package.  The reason for this: UPS automatically collects customs fees and lays its own convenience fees on top for the privilege of doing so.  Ditto FedEx, DHL, other major carriers, etc.

 

Had the shop that made it sent it via Canada Post, USPS would have done what they always do when they receive something like this: forget about it for a few days, X-ray it, then send it on its way once it's obvious that it's what it says on the declaration without any customs fees or duties involved.

48 minutes ago, carlsson said:

From what I know, over here actual customs are only charged for clothing, possibly food. Things like toys and electronics had 0% customs last time I checked, only import VAT. Many people mix customs fees and VAT, and while both may be charged at the same time, they're two different things.

Which is a valid point.  I should make clear that the majority of my VAT experience has been in Ireland and the UK, which appears to operate somewhat differently to Sweden.

 

The big scam in Ireland (which taxes everything it can get away with) has been VRT - Vehicle Registration Tax.  Because import duties haven't been able to be charged on vehicles (new or used) imported into Ireland from the rest of the EU since 1992, the Irish government came up with VRT.  This is a tax that conveniently happens to work out to about what a vehicle would have cost had the Revenue Commissioners been able to duty it at time of entry.  Of course, the tax is only applied at the first registration of the vehicle, so it's not an import duty, just a registration tax 🙄

Edited by x=usr(1536)
Disastrophe!
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Hm. I just looked into the customs directory, and it suggests that for video games exported from the USA after November 10, 2020 there will actually be 25% customs as well as 25% VAT?!? All other countries are exempt of this import customs.

 

This actually was news to me, and I wonder if it really is implemented yet. It means that a game worth $50 with shipping $30 (estimate), there would be $12.50 in customs (calculated on item value) and $20 in VAT (calculated on item value + shipping cost!), plus another $10-20 in handling fees. That is about 75-80% "markup" compared to what the seller charged.

 

https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L:2020:373:FULL

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16 minutes ago, tmp said:

i was under impression that USA had $800 duty/tax free limit

That only applies to US citizens who leave from and return to the country with goods purchased abroad.  For items sent via post, courier, etc. the rules are much different.

7 minutes ago, carlsson said:

Hm. I just looked into the customs directory, and it suggests that for video games exported from the USA after November 10, 2020 there will actually be 25% customs as well as 25% VAT?!? All other countries are exempt of this import customs.

 

This actually was news to me, and I wonder if it really is implemented yet. It means that a game worth $50 with shipping $30 (estimate), there would be $12.50 in customs (calculated on item value) and $20 in VAT (calculated on item value + shipping cost!), plus another $10-20 in handling fees. That is about 75-80% "markup" compared to what the seller charged.

 

https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L:2020:373:FULL

That's just...  Idiotic.  How will it be enforced for digital delivery?  Tacked on at the time of purchase?  If a game is written by a US-based studio but published in Europe (with the data held in the EU), does this still apply?

 

People do not have infinitely deep wallets from which to draw taxes, and it's naïve to believe that measures like these foster home-grown industries or enterprises.  For some things, yes, but for others it's just easier to bootleg or smuggle it.

Edited by x=usr(1536)

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I've got no idea, but I wonder if this is politically motivated and without getting into that prohibited topic, the situation might change over time as the outcome is different compared to when the legislation was formed.

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Ahh but the one thing about HMRC is once your on there radar they never forget and they have a very flexible interpretation on statute of limitations as laid down in law.

 

As long as they bring the case within two years of finding out about an issue, and they may for example find out about a problem 50 years after it first occured, they can apply fines and taxes based on all transactions in the previous 50 years.

 

I know of a local company who used a wrong tariff no. for imports ( only a digit wrong ) and got a hefty back dated bill ( a fair few zero's ) and a full audit to ascertain if it was a deliberate error or genuine mistake. Almost put them out of business.

 

And yes you are right HMRC cannot enforce UK law in another country, but you'd be suprised on how revenue and customs in various countries get along and help each other out especially when tracking down large scale fraud.

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23 minutes ago, x=usr(1536) said:

That only applies to US citizens who leave from and return to the country with goods purchased abroad.  For items sent via post, courier, etc. the rules are much different.

https://goglobal.dhl-usa.com/blog/shipping/what-changes-to-the-de-minimis-value-threshold-could-mean-for-your-business/

Quote

In 2016, the United States raised the de minimis value threshold from $200 to $800, meaning that most goods valued at $800 or less enter the U.S. duty-free.  As a result, more low-value shipments qualify for expedited border clearance and are not delayed by formal entry or payment requirements.

 

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