The Wholesale Forums

[katietuesday]

Hi All

We buy a particular product at approx £40 from China.
We sell for £80/£90.
We incorporate P&P in our price of £80/£90 - so the customer doesnt pay for this.

We pay postage and packaging costs from China, and when the package comes the Chinese say that the product is of very low value.

so my question! we dont earn enough/or want/need to be VAT registered. However, I need to do a tax return. Do I NEED to declare that i've imported goods from China? will anyone ever know? it just means we will have to bump up our price which would not be good. any ideas on how much the tax would be?

thank you, Kitty

[greedyboy]

Originally Posted by katietuesday

We pay postage and packaging costs from China, and when the package comes the Chinese say that the product is of very low value.

Firstly what you is doing is tax evasion and you are breaking the law. When you finally get caught (and you will) you will be in very serious trouble as well as having to pay it all back (plus more)!

so my question! we dont earn enough/or want/need to be VAT registered. However, I need to do a tax return. Do I NEED to declare that i've imported goods from China? will anyone ever know? it just means we will have to bump up our price which would not be good. any ideas on how much the tax would be?

You have to declare your commercial invoices as they are a cost to your business. You do not need to be VAT registered until you hit the £67K threshold.

As for will anyone know. Of course they will. There is a paper trail from China via UK customs and excise, to your destination, ebay and paypal records (if you sell there) and finally through to the end user (customer). Each stage is documented and wouldn't be hard to locate each and every commercial transaction you perform.

You have to declare you purchases in your Tax Return/accounts.

You really need to reevaluate you business practices.

[geosamm]

and which buying value will you show..... the 40 cost? or the very low value the seller says it is at import?.... will C&E records match your own declaration?.....

[katietuesday]

i've only received 1 package! i'm not a hardened criminal and am not even due to complete a tax return yet! just wanted some idea of what happens here. i know theres p&p and tax that I already pay to China, I didn;t know if I need to pay additional tax as such - i guess so and thats fine. just wanted to know what thats likely to be so that i can charge a price for my items and still make a profit.

why are the chinese putting this low value on things? the items are clothes, so i guess there's no set market value as such... sound i be asking the sellers to put the correct value on?

thanks,

[consultant]

If you are not VAT registered, why are you doing a tax return?

[katietuesday]

Originally Posted by consultant

If you are not VAT registered, why are you doing a tax return?

i've called the inland revenue a few times about this as they say I have to do one. i'm self employed.... is this right?
many thanks

[consultant]

FYI, that's a 'Self Assesment' return, but it is easy to confuse the terms/titles! HMRC dont make it easy!

[katietuesday]

oh yes, of course... sorry about that! I have to pay 12% + 17.5 % VAT. my prices are gonna have to go up - which is a shame. I was once gonna import from the US but I was told that you never know how much duty you'll be charged. Is this true?
Many thanks

[consultant]

Duty rates are set, so, as long as you know how it is classified and have the commodity number, you can get the duty rate.

[katietuesday]

This is now getting more complex!

I have spoken to the Duty Tax office and they said that I dont need to pay for the duty/VAT etc upfront or in way of a tax return... that the courier company will charge me.

So! I have received an Invoice from TNT for nearly £70. On a shipment that has a value of USD 112.00. I paid high postage costs to my Chinese seller.... just FYI. and dont know how TNT came to £70. I called them and they dont seem to know. I cant find details of how much P&P actually was (which I understand is also taxable).

Also, I had another package which came from Thailand about a year ago. This was for personal use, not business. The Thai seller stated that the package was worth less that it was - which is probably why I never paid Duty or VAT.Should I now tell someone about this?

I will probably have to re think my entire business after all this as something that costs me 112 USD and I pay £70 duty and customs on means I break even - which means there's no point in my business. I dont see how my competitors are selling at their prices when they have to pay all this tax.

Any ideas? thanks for your time