VAT on Imported Auction Lot - Advice Please

[alfnail]

I would appreciate input on an invoice before I settle please.

I seem to recall there was another thread which discussed Customs VAT regarding purchases from abroad but cannot recall if there was any outcome.

I recently won a lot at a Stacks Bowers Hong Kong auction. I immediately settled this about 4 weeks ago, and the lot was delivered by Fedex about 2 weeks ago.

The original SB’s fees were bad enough for a lot with hammer of just $110, but when I received yesterday another invoice from Fedex for £43.29 on top of the original SB bill it was a complete shock.

I have never bid with SB before now so wondered whether any member may have had a similar experience and, in particular, whether I should be challenging this Fedex invoice rather than just paying it and then trying to forget.

Any thoughts would be most welcome thanks. I have written to SB but as yet no reply.

The calculations are as below, hopefully make sense.

I should add that this was for a banknote, rather than a coin………if that makes any difference to the VAT  

[PWA 1967]

VAT on banknotes like coins unless Gold or Silver is 5% and not 20% if you have paid more then you go onto the GOV.UK website and print off the form including the invoice and Fedex number on the envelope.

Takes 3/4 weeks normally for a refund.

You still have to pay the 5% though when the item arrives in the UK and Fedex will not be interested as they just pass the VAT on anyway .

 

Edited May 30, 2020 by PWA 1967

[jelida]

I can’t comment on the VAT, but the wire transfer fee stands out to me. I use Transferwise, part owned by Virgin, for all of my overseas bank transfers, for much bigger sums, and have a fee of a couple of quid. Basically the service links (en masse) people in say Germany who want to transfer money to the UK for example,  with those who wish to transfer money in the opposite direction so the payment is made to Transferwise In UK pounds and paid into the recipients bank by Euro held in Germany thus negating currency exchange fees and making the transfer very rapid. Looking at the equivalent bank transfer rates and fees, or Paypal etc, I save £10-20 on all my auction payments. And this is a worldwide service.

Sorry about the ad, and hope I haven’t misinterpreted how it works, but I highly recommend the service.

Jerry

[alfnail]

Thanks Pete / Jerry,

I haven't paid the invoice yet, so if you think VAT should be 5% should I tell Fedex to re-invoice me, or should I pay the 20% and then try to reclaim the 15% difference afterwards?

If the latter, then do you happen to have a link to the page where I can get a form printed, or the actual form itself please Pete?

As for the transfer  'wire' fee they invoiced me for that  without me advising how I was going to pay, so the $35 appeared to be their standard amount regardless of payment method. I actually paid using paypal so I think their actual costs would have been way less than $35.

By the way if anyone reading this ever pays in $ using paypal then it's quite a bit cheaper if you use a credit card with no foreign transaction fees (e.g. Santander) rather than accepting paypal's own exchange rate. You get that option when settling whilst logged onto paypal. It saved me about £8 on this particular transaction.

[PWA 1967]

4 minutes ago, alfnail said:

Thanks Pete / Jerry,

I haven't paid the invoice yet, so if you think VAT should be 5% should I tell Fedex to re-invoice me, or should I pay the 20% and then try to reclaim the 15% difference afterwards?

If the latter, then do you happen to have a link to the page where I can get a form printed, or the actual form itself please Pete?

As for the transfer  'wire' fee they invoiced me for that  without me advising how I was going to pay, so the $35 appeared to be their standard amount regardless of payment method. I actually paid using paypal so I think their actual costs would have been way less than $35.

By the way if anyone reading this ever pays in $ using paypal then it's quite a bit cheaper if you use a credit card with no foreign transaction fees (e.g. Santander) rather than accepting paypal's own exchange rate. You get that option when settling whilst logged onto paypal. It saved me about £8 on this particular transaction.

I dont think Fedex will re-invoice you ,just threaten you and go on with themselves 😀 ,but you could try.

Mel is out at the moment but will mail you the link later when she gets home as its been her thats sorted it out a few times before.

[alfnail]

Thanks very much Pete. I did also wonder whether they should be charging Vat on Shipping and Insurance, rather than just the item itself. 

[Rob]

3 minutes ago, alfnail said:

Thanks very much Pete. I did also wonder whether they should be charging Vat on Shipping and Insurance, rather than just the item itself. 

Yes they do. That's one thing that is consistent, but usually at 5% instead of the expected 20%. It all seems to get lumped under the VAT rate for the item.

[1949threepence]

I'm no expert on these things, and the invoice above doesn't exactly look simple to work out. In fact looking at it, I wouldn't even know what amount was actually payable. But what strikes me is that the shipping company have come back at you for an additional fee several weeks post delivery. Why wasn't the correct total charged with delivery at the time, and were you advance warned that another sum might be chargeable at a later date? 

Maybe that's a naive question, I don't know. But I'd be damned annoyed if I got something like that when I thought I'd already paid the due amount in good faith. It's never happened to date for me, and I've had several items delivered by Fedex.   

Personally, Ian, I'd ask Fedex for chapter and verse before paying. Good luck with receiving a response that's intelligible to a normal person who speaks normal English, if you do decide to go down that route, though.  

[PWA 1967]

I have sent you the link and form Ian ,although as Mel has just mentioned the ones she has done did not include Fedex.

I would still speak to them before you fill in the form or phone anyone else as they are really helpful and will explain exactly what to do now or at anytime in the future.

Edited May 30, 2020 by PWA 1967

[Rob]

26 minutes ago, 1949threepence said:

I'm no expert on these things, and the invoice above doesn't exactly look simple to work out. In fact looking at it, I wouldn't even know what amount was actually payable. But what strikes me is that the shipping company have come back at you for an additional fee several weeks post delivery. Why wasn't the correct total charged with delivery at the time, and were you advance warned that another sum might be chargeable at a later date? 

Maybe that's a naive question, I don't know. But I'd be damned annoyed if I got something like that when I thought I'd already paid the due amount in good faith. It's never happened to date for me, and I've had several items delivered by Fedex.   

Personally, Ian, I'd ask Fedex for chapter and verse before paying. Good luck with receiving a response that's intelligible to a normal person who speaks normal English, if you do decide to go down that route, though.  

It looks clear to me. There's the sum payable to SB which is £184.55, then there is the FEDEX bit which is VAT on the SB total less the wire costs leaving a net £156.49. Then the import VAT is due plus their handling fee of £12. The only debatable point is the rate of VAT applied, but something extra is payable because the SB bit of the invoice doesn't have an import VAT component.

If you buy from CNG then you pay the import VAT at the time you settle up leaving nothing else to pay. This might be because they have a London office and UK bank account, so do all the VAT accounting through it. I presume they import a number of lots on the same consignment and settle up the VAT that way. Saves a lot of hassle.

[secret santa]

I've had terrible problems with Fedex doing this before. I did once get them to go back and renegotiate with Customs to get the VAT reduced from 20% to 5% but I've overpaid many times. I now refuse to use Fedex - I ask the auction houses to use UPS who always send you a form to indicate the nature of the goods and they always charge the correct 5% on numismatic items.

[1949threepence]

2 hours ago, Rob said:

It looks clear to me. There's the sum payable to SB which is £184.55, then there is the FEDEX bit which is VAT on the SB total less the wire costs leaving a net £156.49. Then the import VAT is due plus their handling fee of £12. The only debatable point is the rate of VAT applied, but something extra is payable because the SB bit of the invoice doesn't have an import VAT component.

If you buy from CNG then you pay the import VAT at the time you settle up leaving nothing else to pay. This might be because they have a London office and UK bank account, so do all the VAT accounting through it. I presume they import a number of lots on the same consignment and settle up the VAT that way. Saves a lot of hassle.

OK, so from the list of figures above, which is the actual one which now needs to be paid? If I received that, I'd just assume it was a "for information only" notification, because nowhere does it say "pay this", or words to that effect. 

[Rob]

1 hour ago, 1949threepence said:

OK, so from the list of figures above, which is the actual one which now needs to be paid? If I received that, I'd just assume it was a "for information only" notification, because nowhere does it say "pay this", or words to that effect. 

It's a table that has been compiled by Ian as he indicates. Invoices would be headed either SB or FEDEX, not given as a summary with exchange rates etc.

[1949threepence]

Looking at this government advice it appears that any VAT charge is made in advance and applied before you can receive the item. In this case Ian has already taken receipt of the item.

However,. despite the government advice, it seems that Fedex routinely bill recipients, post delivery - link to that

interestingly the £12 "advancement fee" is generally considered to be a rip off, and should be disputed - this link is very informative on that score   

Was there any reference to VAT on your original SB invoice, Ian?

[alfnail]

3 hours ago, 1949threepence said:

OK, so from the list of figures above, which is the actual one which now needs to be paid? If I received that, I'd just assume it was a "for information only" notification, because nowhere does it say "pay this", or words to that effect. 

Thanks for all the input everyone.

I actually made a mistake in my table of figures when adding £31.29 to £12. It should of course have been £43.29 not £41.29. This figure of £43.29 is what Fedex has invoiced me for.

1 hour ago, 1949threepence said:

Looking at this government advice it appears that any VAT charge is made in advance and applied before you can receive the item. In this case Ian has already taken receipt of the item.

However,. despite the government advice, it seems that Fedex routinely bill recipients, post delivery - link to that

interestingly the £12 "advancement fee" is generally considered to be a rip off, and should be disputed - this link is very informative on that score   

Was there any reference to VAT on your original SB invoice, Ian? 

I may use that letter to challenge the £12 advancement fee Mike. There was no reference to VAT on the SB invoice, it did say 'Tax $0.00'.

There seems to be a consensus that the VAT rate should be 5%, not 20%. May I ask if anyone can point me at a government webpage which says this please?

I could then perhaps dispute the advancement fee and the VAT rate within the same letter to Fedex, If not successful there then I can try Customs and Excise.

Sorry if a bit incoherent, been in the garden drinking wine!

 

[1949threepence]

19 minutes ago, alfnail said:

Thanks for all the input everyone.

I actually made a mistake in my table of figures when adding £31.29 to £12. It should of course have been £43.29 not £41.29. This figure of £43.29 is what Fedex has invoiced me for.

I may use that letter to challenge the £12 advancement fee Mike. There was no reference to VAT on the SB invoice, it did say 'Tax $0.00'.

There seems to be a consensus that the VAT rate should be 5%, not 20%. May I ask if anyone can point me at a government webpage which says this please?

I could then perhaps dispute the advancement fee and the VAT rate within the same letter to Fedex, If not successful there then I can try Customs and Excise.

Sorry if a bit incoherent, been in the garden drinking wine!

 

It's like a maze, Ian, but I did find this bit:-

Quote

 

1.5 Which antiques are eligible for VAT on a reduced value?

These are:

antiques of an age exceeding 100 years including items of numismatic interest provided they are not part of any collection or a collector’s piece

postage and revenue stamps of an age exceeding 100 years provided they are not part of any collection or a collector’s piece

Full details of how to calculate the reduced value are contained in VAT Notice 702: imports.

 

The above is from the government's website here

Obviously no idea if your item is over 100 years old, and quite how they draw any meaningful conclusion about whether it's part of a collection or a collector's piece, I've no idea. All items of numismatic interest are potentially part of a collection, so I've no idea what they mean. Nor do they state what the reduced rate of VAT actually is.

 

[alfnail]

Thanks again Mike.

The lot was for 2 banknotes, produced in 1971, so only 49 years old. Both of them are no longer legal tender, so collectors items.

Just wondering if the 'less than 100 years' may cause me an issue with the 'antiquities' definition. 

[Sword]

48 minutes ago, alfnail said:

There was no reference to VAT on the SB invoice, it did say 'Tax $0.00'.

It is probably referring to the fact that there is no VAT charged in Hong Kong.

[1949threepence]

12 minutes ago, alfnail said:

Thanks again Mike.

The lot was for 2 banknotes, produced in 1971, so only 49 years old. Both of them are no longer legal tender, so collectors items.

Just wondering if the 'less than 100 years' may cause me an issue with the 'antiquities' definition. 

Good luck Ian. 

[alfnail]

Thanks Mike, I'm going to phone the revenue in the first instance as Pete has recommended, and take it from there.

[1949threepence]

Interestingly, gold coins are exempt from VAT - link

The rest are covered by HMRC notice 362 which basically says that items of numismatic interest over 100 years old, come under the umbrella definition of "antiques" and as such are entitled to a reduced rate of VAT, presumably 5%, although no actual figure is quoted. 

Unused postage stamps over 100 years old are VAT free, whereas (conversely and by definition, one would assume) franked postage stamps and coins over 100 years old are not, providing they are not a collectors piece or part of a collection - if nothing else, it might be worth getting this latter point clarified with HMRC, as they could all be described as collector's pieces or part of a collection. 

So on the face of it Ian, unfortunately I think it is VAT at 20% for your banknote. 

Edited May 31, 2020 by 1949threepence

[alfnail]

Thought this would amuse.

I sent off form BOR286 to the Revenue, as suggested by Pete in a separate email to me on 30th May 2020.

This morning, almost 3 years later, I get a simple reply as per below, referring me back to FEDEX!!

The attachment to their reply shows that they received my request on 8th June 2020.

GREAT SERVICE FROM CUSTOMS

[PWA 1967]

On 4/6/2023 at 3:21 PM, alfnail said:

Thought this would amuse.

I sent off form BOR286 to the Revenue, as suggested by Pete in a separate email to me on 30th May 2020.

This morning, almost 3 years later, I get a simple reply as per below, referring me back to FEDEX!!

The attachment to their reply shows that they received my request on 8th June 2020.

GREAT SERVICE FROM CUSTOMS

 

Yesterday i received payment from them after about 10 days for three seperate invoices and had numerous this year.

Two other forum members i know have also got a refund within a short period of time.

All you have to do is POST them the original envelope and invoice (i keep photocopies) showing the duty paid (NOT email them) accompanied with a brief letter or the form you can print off, asking for your refund and with your bank details.

If your buying a few its also easier to send them together, maybe at the end of each month.

 

[TomGoodheart]

I thought I'd just mention I bought from Stacks Bowers in the US a couple of weeks ago. Paid by credit card for a 2.5% supplement.
Got an email on Thursday saying it was being shipped and would be delivered yesterday. Some hope I thought, but .. slight delay because I missed the request to pay the vat (correct amount and reasonable fee from FedEx of £4 - rather cheaper than Royal Mail!) but it arrived this morning.

So things can go right (I wasn't sure how it would go as you occasionally hear of problems with US posted items) and in this case I actually received the coin faster than from some UK auction houses!