UK Vat

Hi Guys
I have just read a post on Norvic Philatelics Blog that oversees sellers will be required to collect VAT on goods entering UK at 20%.
Not sure if it will include all stamp sellers, this will come into effect on January 1 2021.

Comments

  • 16 Comments sorted by Votes Date Added
  • I just received this message from stamps.com

    Effective Jan 1, 2021, value added tax (VAT) must be collected for all goods entering the United Kingdom (UK).

    There will be a 20% VAT rate on goods valued up to £135 (about $180 USD), which you must collect unless your online marketplace (e.g. eBay, Amazon, Etsy, etc.) is already collecting it. Current procedures for goods valued over £135 remain the same.

    To prevent your UK shipments from being delayed, held, or returned by UK customs in 2021, please take the following steps:

    1. Register for a VAT number with the UK: https://www.gov.uk/vat-registration
    2. Collect VAT at the time of purchase.
    3. Make quarterly VAT return payments to the UK.

    In addition, you should include your VAT number on your customs declarations. This process will vary depending on your shipping software, so be on the lookout for instructions early next year.

    Looks like I will need to stop selling to the UK with this added burden and risk of non-delivery. Do other countries also expect all sellers to collect tax for them?



  • There use to be an exemption of VAT on stamps over 100years old. Do any of the UK sellers know if this is still in effect?

    Also how are they going to enforce tax collection in other countries? They will have to put 007,008,009, "Agent86" and "Agent99" on each case of failure to send collected money to the VATMEN. Spectre and Kaos are going to have a field day thinking up villianous schemes to pocket the tax.
  • The British penchant for making SURE "the people" get taxed is not new. Sadly, selling to our brethren in the UK just became really tough.images
  • So essentially if I sell a 50c item with $1.20 USPS first class international shipping in a single envelope and mail it to the buyer in the UK, I have to go through registering with the UK, collecting 10c VAT on the purchase price, keep an accounting of all such transactions, then sending the UK that collected VAT every three months!!!??? Hard pass.

    From stamps.com BLOG...https://blog.stamps.com/2020/12/22/shipping-from-the-u-s-to-uk-with-2021-vat-rules/
  • Greg:
    The UK Post Office may also be interested in you shipping merchandise without paying the correct postage
    Mike
  • The very few orders (one or two stamps each) I have sent to buyers in the UK have received them via USPS First Class International mail at $1.20. Do I now have another reason to not sell to the UK? What am I missing?
  • The minimum cost that I have found for shipping merchandise (stamps or covers) to the UK is at Shipping Easy for about $7. They handle the international shipments in bulk and apply the required customs declaration
  • edited January 12 1 LikesVote Down
    Greg, As of January 2018 it is no longer legal to send merchandise via First Class International Mail. This service is for personal correspondence or documents - not merchandise. You can read the full explanation of this on Hip Help.

    "Within the United States, effective January 21, 2018, First Class Mail International Large Envelope/Flat service for merchandise is no longer available from the USPS. First Class Mail International Flats will only be approved for use when sending documents. This change was made by the USPS to comply with Universal Postal Union requirements. You can view the USPS announcement here: https://about.usps.com/postal-bulletin/2017/pb22482/html/updt_006.htm


    Unfortunately, this means that any seller who ships an item from the United States, to an International destination must use the USPS First Class Package International service to legally send any merchandise directly through the USPS; this includes any collectible stamps, postcards, and comic books.

    How much does USPS First Class Package International service cost?

    Rates for USPS First Class Package International service start from approximately $12 to $20 depending on the destination."

    So now this UK VAT tax creates another "headache" for US sellers. Don't think I'll be shipping to the UK, either.
  • Well I try to learn something new everyday so I don't waste the day and I did! Thanks Jeri and Michael. It's a bit funny because when I first started my store, I shipped only to US destinations then I had several folks from overseas message me and ask to purchase some items so I opened up to international shipping. Guess I'm done with that. I can't imagine many buyers will want to pay $12 to $20 to have a few stamps mailed to them. I guess there a few but not enough for me to worry about in my case.
  • Greg I charge $9.25 for worldwide shipping because both PayPal and HipStamp collect fees on this amount in addition to the $7.10 paid to Shipping Easy. Last year I had 114 worldwide orders with many repeat buyers, so if a collector wants your stamps, they are willing to pay for it.
  • John, thanks. Maybe I'll consider doing it that way but we now still have to account for the 20% VAT and register, account for it, and send it to the UK every quarter so still more work and accounting. I really don't want to limit the market to just the US but not doing this for a living might make it difficult to justify the extra stuff to deal with.
  • I'm still analyzing whether I want to continue to sell to buyers in the UK. My initial reaction was no, but I do have several customers. At this time, I don't believe HipStamp provides sellers an option to collect this 20% tax from the buyers. Their policies prevent sellers from requesting additional money from buyers after a purchase, so I guess this leaves only two options, to cancel their order or pay the tax for the buyer. I certainly don't want to pay the tax.

    Hopefully MARK can chime-in and advise how sellers should proceed.

    Additionally does a simple method exist in order to exclude a country? When I asked HipStamp they told me only 2 default methods existed for ship to .. "domestic" and "everywhere else", but that I could set up my own countries or regions. To set up all other countries except UK would be a pain.
  • John, more very good points to consider. I'm just not sure it's really worth it and that's sad.
  • John,

    In order to remove a country from where you sell to, just go into postage setup scroll down the page and you will see location groups. Locate the country you want to remove, click on the little X and it will take it out. Save settings. Then you will have to update your listings to take that country out of your current listings. (It's really very simple)
  • Thanks Michael

    HipStamp just got back to me and they were kind enough to do that for me. My sales to UK was only about $200 last year and that is not worth the hassle of dealing with this tax.
  • Hi All,

    I've been reading this forum with much interest and despair! As a Brit living in France, I too am considering stopping my sales to the uk. I found the following link on the uk vat website. I'm not sure it is completely relevant but thought I would post it here to see what others make of it? (If this is not relevant, maybe admin could delete it).

    https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021

    Good luck with this - I'm going to have to re-read it again
    James
Sign In or Register to comment.