Could you get charged VAT doing a trade outside the EU?

[trisdg]

Have been recently thinking of trading one or two watches, and have seen one I like in the US.

I know if I but a secondhand watch from outside the EU then I'm liable to pay VAT, but if I trade a watch could I still potentially get charged even if no money changes hands? Also, if I trade up and need to give the seller an extra £800 (or however much), would I then get charged VAT on this amount?

Just wondered if anyone has been in this boat, or how customs works when regarding trades.


Cheers,
Tris

[MattG]

That's a tricky question, I'd be very interested to know the answer to that. Might have to call up customs and ask?

[JasonM]

VAT is chargeable on the value of the item imported, even if its a trade and no money changes hands or a gift , the easiest way ( for them ) is they charge is by the value declared, however they can disagree with this valuation and apply what they deem to be the items value.......

[darrenb]

You'll be charged VAT and Excise duty on the value stated on the outside of the package, either the green customs declaration or if its sent via USPS Insured post for example, then on the value stated on the shipping label.
It will apply whether they are new or second hand items.
If you disagree with the amount charged you'll have to pay upfront to get the item delivered by the carrier (ie Royal Mail if its sent by USPS), then make a claim afterwards, indicating why you dispute the charges and evidence to back it up.
Be careful about asking sender to mark it as only worth 100 bucks....you'll not have any insurance unless you ask for it and then the true replacement value has to be stated on the package.

[itsgotournameonit]

I have had watches that have gone through customs with no issues and without charge but it is very rare for this to happen.More often than not vat and handling will be charged.

[trisdg]

Cheers for the answers.

Looks like I'll be staying within he EU then

[Jon Kenney]

Would a commodity code be required if you were conducting a trade?

9102110000 for import and 91021100 for export of a mechanical watch.

Third country duty of 4.5% plus vat standard rate.

[markrlondon]

You'll be charged VAT and Excise duty

Third country duty of 4.5% plus vat standard rate.

Note that Excise Duty does not apply to watches at all, ever.

Customs Duty (a different tax to Excise Duty!) does apply to watches at a rate of 4.5% but you will never, ever be charged it on a single watch shipment due to a combination of the non-linear way it is calculated (it is bracketed to a very limited range of values) and HMRC/Border Force collection policies. VAT at the usual 20% is also charged on watches, of course.

[gregory]

That's a tricky question, I'd be very interested to know the answer to that. Might have to call up customs and ask?

I will answer that one for you on their behalf.

Cheque please!!

[Zigster]

Note that Excise Duty does not apply to watches at all, ever.

Customs Duty (a different tax to Excise Duty!) does apply to watches at a rate of 4.5% but you will never, ever be charged it on a single watch shipment due to a combination of the non-linear way it is calculated (it is bracketed to a very limited range of values) and HMRC/Border Force collection policies. VAT at the usual 20% is also charged on watches, of course.

I might have misunderstood what you meant but I've certainly been charged 4.5% duty on a single watch from the US (and on various straps as we'll).

[markrlondon]

I might have misunderstood what you meant but I've certainly been charged 4.5% duty on a single watch from the US (and on various straps as we'll).

In that case you were almost certainly mischarged.

Something similar happened to me (on more than one occasion) from the USA when, on the customs declaration, the vendor described watches as "horological instruments" and the Border Agency[1] inspector misunderstood and categorised them as musical instruments! I wrote to the Border Agency explaining the error and they refunded me the erroneously charged taxes.

Customs Duty on watches is calculated as follows: It is charged at 4.5% but it is bracketed to a maximum of the local equivalent of €0.80 per watch and a minimum of €0.30 per watch. In addition there is a HMRC/Border Force policy of not collecting Customs Duty if it amounts to £9 or less. As you can see, the net effect of these rules is that you should never in practice pay Customs Duty on a single watch shipment.





Footnote:-
1: It was Border Agency at the time but is now Border Force.

[Dave+63]

I suppose the way it's looked at is that you're buying a watch from outside the EU. How you choose to pay (cash, cheque, watch, other means etc) is unimportant to them, they just want their money.

[Zigster]

In that case you were almost certainly mischarged.

Something similar happened to me (on more than one occasion) from the USA when, on the customs declaration, the vendor described watches as "horological instruments" and the Border Agency[1] inspector misunderstood and categorised them as musical instruments! I wrote to the Border Agency explaining the error and they refunded me the erroneously charged taxes.

Customs Duty on watches is calculated as follows: It is charged at 4.5% but it is bracketed to a maximum of the local equivalent of €0.80 per watch and a minimum of €0.30 per watch. In addition there is a HMRC/Border Force policy of not collecting Customs Duty if it amounts to £9 or less. As you can see, the net effect of these rules is that you should never in practice pay Customs Duty on a single watch shipment.


Footnote:-
1: It was Border Agency at the time but is now Border Force.

That's annoying! Too late for me to do anything about it now, and (thinking about it) it wouldn't have been a massive sum of money - probably only about £20. One to bear in mind another time, I guess.