Is there any bright spark out there that knows anything about import taxes?
I am purchashing goods from China and selling them online. I know what the rates for import taxes/VAT on the goods I am selling are.
My question is this. How exactly does import duty work?
To simplify. I buy goods from China for £100. However the manufacturer has stated that they are are only going to put £20 on the customs invoice. Hence I will only have to pay duty on £20. Alarm bells are ringing for me. When is custom duty payable? Could the tax man come back to me at a later date and look at my accounts, see that I paid £100 and therefore request more taxes, or is the onus on the manufacturer to put the correct duty?
Make sure the supplier completes an accurate Customs Declaration
Goods arriving in the UK from outside the EU by post or courier must have a Customs Declaration fixed to the package - completed by the sender. The declaration should include:
a description of the goods their value whether they are gifts, commercial or personal items Some websites will offer to show a value on the Customs Declaration that's much lower than the actual price paid so that you don't have to pay duty and/or VAT when the goods enter the UK. This is wrong: if you're ordering goods over the Internet, it is in your own interest to make sure that the sender abroad makes a complete and accurate declaration. If no declaration is made, or the information is inaccurate, the package may be delayed whilst the UK Border Agency (UKBA) makes further enquiries, or in some cases the package and its contents may be seized and as the importer of the goods you will be liable for any charges.
If you ever had a VAT inspection you can be pretty sure that one thing checked would be that your actual payments to foreign suppliers matched the declared value of the goods to customs on entry. What is being proposed by your supplier is fraud, pure and simple and if you're caught the punishment is likely to be significantly greater than just being asked to pay the back tax.
Any business doing a significant proportion of import or export is likely to be viewed by HMRC as "high risk" so inspections are correspondingly more likely. Such behaviour also gives you a commercial advantage over those businesses that do obey the rules and pay their taxes, so you might get shopped by competitors too, if they think your prices look too low for you to be obeying the rules.
