To international buyers - Check the customs charges and VAT

[Stonelesscutter]

This is in the hope it'll help other international customers of LTT store. Please note that this is not a complaint directed at LTT. Although there is an aspect to this storey which involves a mistake by LTT, upon contacting them, it was instantly resolved. In fact, I wasn't even aware of LTT's mistake until they informed me of it and resolved it. This is more to illustrate that you may receive a bill from a third party for customs charges, and if you do, you should have a close look at that bill. Just for the record, I wish to state that I am just an average consumer and have no expertise when it comes to importing/exporting and taxes.

 

Recently, I purchased a few items from LTT store with a combined value of USD 229.98. I live in Northern Ireland, and in this case UK import customs apply. On top of the 229.98, LTT charged me for shipping and for VAT. As it turns out, the UK policies on imports mean that for shipments with a value of over GBP 135.00, which was the case here, the VAT needs to be paid in the UK instead of in Canada. This is why, when I contacted LTT, they recognized the mistake, and refunded those charges to me.

 

The reason I contacted support in the first place, was because I received a letter from the courier Parcelforce requesting me to pay a bill of GBP 69.49 (close but not "nice") in order for them to deliver the parcel to me. This bill consisted of the following charges.

 

Customs Duty - GBP 11.24

Excise Duty - GBP 0.00

Import VAT - GBP 46.25

Other - GBP 0.00

Clearance Fee - GBP 12.00

Total - GBP 69.49

 

Another thing to note is that this letter referenced the country of origin as Germany, instead of Canada. I found this rather peculiar.

 

I paid the bill in order to receive the parcel, but upon receiving it, I found documentation in the form of a Customs Declaration CN 23. This documentation clearly stated the country of origin to be Canada and the total value of the items to be USD 229.98. I took some time to visit the HMRC (Her Majesty's Revenue & Customs) website in order to try to figure out what charges would be appropriate for the items I had purchased. I soon found that due to a trade agreement between Canada and the UK, the tariff for customs duty on these items should be 0.00%. Aside from this, I calculated the 20% VAT which is applicable in the UK for these items to be USD 46.00, which at the current exchange rate corresponds to a value of approximately GBP 33.92. It seems like someone at Parcelforce just entered the USD amount into their system as if it were a GBP amount.

 

As a result from my findings, I have contacted the courier Parcelforce to claim back the approximate amount of GBP 23.57 which I had been overcharged for customs duties and VAT.

 

So, to sum things up in short for you, if you find yourself getting slapped with an extra bill for your LTT purchase, double-check the following.

 

• Are the VAT charges by LTT appropriate for that particular order?
• Are the charges for customs duties applicable for the trade between Canada and your country for that type of items and their value?
• Are any VAT charges levied in name of the country you live in appropriate and correctly calculated?

 

Just wanted to leave this here in the hope that it might help someone else. I'll certainly be having a closer look at any future customs charges I might receive.

 

 

[Stonelesscutter]

Question:

Anyone else received customs charges as though Wizmo Creator Warehouse is from Germany?

[Liviu]

Hi,

it looks like it's what just happened to me.

On an order of $192.96 Canadian,

shipping $21.99, 

taxes $42.99 

So total paid online $257.94 Canadian.

I got this beautiful letter from Parcel Force courier (which is an UK Royal Mail handler) for £74.57 =~ $128.51 Canadian.

see attached letter below.

I called parcel force and said they've got nothing to do with the amount and to call HMRC. I did, and they basically said import duties are to be charged, but they wouldn't bother investigating if the amount is correct.

So in the courier chain, 

it was Wizmo, then DHL via US and in tracking it shows from  Richmond to CA US to UK , but on DHL intermediate tracking it's got a CG..DE code which means Germany to parcel force apparently.

 

[Stonelesscutter]

Yeah, that looks like they did the same to you that they did to me. I received the following reply from Parcelforce after having emailed them through their web form.

 

Quote

A part of this charge is the clearance/handling fee which is payable to Parcelforce Worldwide. This charge is to cover the administration when Customs raise a charge on imported goods.

 
Unlike most other carries we generally don't charge for Customs clearance except where duty or VAT is payable. In this case we charge an Inbound Customs Clearance fee. This covers the cost of presenting the parcel to Customs, opening and repackaging if necessary. We also pay the Customs duty or VAT on the addressee's behalf and collect the payment from them.
 
To receive a refund, you will be required to complete one of the forms below that can be found on the HMRC website  www.hmrc.gov.uk (search for Notice 143).
 
If your item is of high value and has been processed by our clearing agents, you need to complete a C285 form clicking here 
 
If your item has not been processed by our clearing agents, you need to complete a BOR286 form clicking here 
 
Please ensure that you send the original charge label customs declaration and any supporting documents (invoice etc) to the address provided on the website.
 
If you need help with anything else please reply to this email or if you would prefer to speak to one of our advisors please call 03448 00 44 66. Calls are charged at national rates.

 

From this response I get the impression that Parcelforce either didn't read my email properly or just sent me a standard reply, as in my email to them I had clearly stated to not having any objections to the clearance fee, but having issues with the customs charges and VAT charges. I decided to have a look at their suggestions anyway though. Upon reading through the information on Notice 143 on the HMRC website, at section 3.5, I came across the following.

 

Quote

As the handling fee is separate from customs charges, queries about the handling fee should be raised with Royal Mail or Parcelforce Worldwide, as appropriate. Royal Mail do not answer queries about customs charges. If you have any queries about the charges raised on your parcel you should contact Border Force – for more information, see section 3.6.

 

And this is what section 3.6 says.

 

Quote

If you have any questions about a particular customs charge you should contact Border Force as soon as possible using form BOR286.

 

When you write to Border Force, you should include as much detail as you can, including the customs charge label, the customs declaration and the part of the wrapper with your address on it. If your claim is about overcharged tax because the declared value of the goods was incorrect, you will be required to supply evidence, for example, an invoice, receipt of purchase to support your claim.

 

Border Force deal with thousands of packages every day and without this information they may not be able to trace your package in their records. In the event of a claim, you should retain copies of all wrappings and documents until your claim is settled.

 

It seems that I have to contact Border Force. Now I'm looking at that BOR286 stuff.

[Mr.Meerkat]

1 hour ago, Liviu said:

it was Wizmo, then DHL via US and in tracking it shows from  Richmond to CA US to UK , but on DHL intermediate tracking it's got a CG..DE code which means Germany to parcel force apparently.

I wouldn't be surprised if Wizmo had some kind of distribution centre in Germany, which forwards all the packages to destinations on this side of the pond. In a lot of "grey market" e-tailers or say Aliexpress, it's not uncommon for them to ship multiple orders in bulk, pass customs together and then forward the individual orders. It's pretty easy to spot as they usually give you say a UK-UK RM tracking number, a "domestic" DPD/DHL tracking number or whatever, which if you tried tracking on the courier's website, they will say they haven't received the parcel yet/no tracking info but if you go to the e-tailer's website, it'll show you it getting loaded on the flights, entering and clearing customs ect. As for why they do it this way, it's usually to dodge import taxes/duties, allowing them to undercut "proper" retailers. I deffo won't complain if it means that £1000 item is only £600, new, with manufacturer's warranty

 

Edit: Should specify that for Wizmo, they probably do it to reduce distribution costs (if they are using this method) and usually, it will speed up delivery times as well.

[Stonelesscutter]

3 minutes ago, Mr.Meerkat said:

I wouldn't be surprised if Wizmo had some kind of distribution centre in Germany, which forwards all the packages to destinations on this side of the pond. In a lot of "grey market" e-tailers or say Aliexpress, it's not uncommon for them to ship multiple orders in bulk, pass customs together and then forward the individual orders. It's pretty easy to spot as they usually give you say a UK-UK RM tracking number, a "domestic" DPD/DHL tracking number or whatever, which if you tried tracking on the courier's website, they will say they haven't received the parcel yet/no tracking info but if you go to the e-tailer's website, it'll show you it getting loaded on the flights, entering and clearing customs ect. As for why they do it this way, it's usually to dodge import taxes/duties, allowing them to undercut "proper" retailers. I deffo won't complain if it means that £1000 item is only £600, new, with manufacturer's warranty

Even if that is the case, the country of origin is still Canada, as is stated on the CN 23 Customs Declaration. And Wizmo is not the one charging me customs duties and VAT, Parcelforce is.

[Stonelesscutter]

Dear lord. It looks like the only way to contact Border Force is by snail mail. Seems like they wish to discourage people as much as they can from getting the wrongful charges refunded. I have prepared the required documentation as mentioned on their site and form. Now I have to find some place to print the files, as our printer is currently not working, then to find an envelope and mail the stuff. I should send a bloody invoice to Parcelforce for all the costs and labour involved in having to fight to correct their "mistakes".

[Stonelesscutter]

I received another reply from Parcelforce.

 

Quote

You may have ordered the goods from a Canadian site, however the parcel was despatched from Germany.  The tracking number under which is was sent was CG012574766DE.

 

[Just that Mario]

what it probably means is that it was actually sent to Germany on a DHL plane and from there to UK. Reading this UK taxes thing makes it sound ridiculously idiotic compared to EU,but both have issues with LTT store.

[Liviu]

@Stonelesscutter

I don't know how you have the patience and drive to dig through all that.

I've given up, I'm not paying incorrect charges and I'll do everything I can to avoid parcelforce, dhl and whatever other dodgy charges from now on. I'm counting this as a full loss as far as I'm concerned and won't sweat it anymore.

So I'll wait for an LTT local warehouse.

All the best!

[Guspa]

The thing is - LTT store SHOULD NOT charge EU customers the VAT, yet they do - every time.
VAT (generally) is paid by the buyer just once and most of the times - in the country of the buyer.
What I feel like the problem is that the LTT Store is unable to turn off VAT collection from EU customers at all (since they use Shopify and I know damn well how restrictive and  inflexible the non-PLUS tier is - the PLUS tier costs ~2k USD a month).

Couple of months back I've gotten a response myself from LTT store team stating, that I was not supposed to be charged VAT by the customs, since It was already collected on the behalf of the buyer by LTT - which I pretty much doubt and I call a potential ignorance. It would be true in case LTT store had an IOSS number (which basically means "being a registered VAT payer in the EU, and paying the tax on the behalf of the customer).

Incoming parcels from outside the EU that have IOSS number attached, usually do not end being withheld by the customs.
Aliexpress for example started to collect VAT on the behalf of the customer in mid 2021, and (if I am not mistaken) is registered in Netherlands.

(Edit: Forgot to mention, that the LTT store team of course refunded me the VAT amount)

[silentdragon95]

If I may add something, I was generally pretty surprised when I got a letter from the customs department. Of course I do realize that there are import taxes for products not from the EU, but since the checkout process already included "taxes" (and does not further explain what those taxes are) I initially assumed that the import taxes would be included.

 

I do realize that this was mostly ignorance on my part and I'm not complaining about it, but I do think that it would be a good idea to clarify what taxes are or aren't included during the checkout process for international customers.

[Stonelesscutter]

21 hours ago, Guspa said:

What I feel like the problem is that the LTT Store is unable to turn off VAT collection from EU customers at all (since they use Shopify and I know damn well how restrictive and  inflexible the non-PLUS tier is - the PLUS tier costs ~2k USD a month).

Seems to me like the store is successful enough to warrant a plus tier.

[ColinJ451]

The other golden rule is to not have an order over £135 or even $135 if you want to be safe from this shit

[Stonelesscutter]

So, I have a little update on this, as I just received a letter in the post from Border Force. I had asked them to send me back GBP 23.57, and explained them my reasoning for that. The result is that they're sending me GBP 57.49. That's a lot more than I had anticipated. Seems these extra efforts I've put into looking up information and communicating with some entities have been rather worth my while!  I shall attach the reply from Border Force, redacted of course.

 

 

[BiLKiNiS]

On 2/16/2022 at 9:28 PM, Guspa said:

The thing is - LTT store SHOULD NOT charge EU customers the VAT, yet they do - every time.
VAT (generally) is paid by the buyer just once and most of the times - in the country of the buyer.
What I feel like the problem is that the LTT Store is unable to turn off VAT collection from EU customers at all (since they use Shopify and I know damn well how restrictive and  inflexible the non-PLUS tier is - the PLUS tier costs ~2k USD a month).

Couple of months back I've gotten a response myself from LTT store team stating, that I was not supposed to be charged VAT by the customs, since It was already collected on the behalf of the buyer by LTT - which I pretty much doubt and I call a potential ignorance. It would be true in case LTT store had an IOSS number (which basically means "being a registered VAT payer in the EU, and paying the tax on the behalf of the customer).

Incoming parcels from outside the EU that have IOSS number attached, usually do not end being withheld by the customs.
Aliexpress for example started to collect VAT on the behalf of the customer in mid 2021, and (if I am not mistaken) is registered in Netherlands.

(Edit: Forgot to mention, that the LTT store team of course refunded me the VAT amount)

I had the same issue with an order shipping to France, I payed 20% of taxe at checkout and then at arrival the postal service requested 12% of custom fees (i'm of with that) and 20% of VAT because the price listed on the custom declaration form are exluding the taxe payed at checkout.

 

I will send a request to the support team and maybe also to the postal services

[No_dice]

The same thing happend to me, i bought 3 shirts, and was charged an extra VAT of  30€ In order to recieve my package. 
also from germany, instead of canada. 
I contacted ltt support , week later still no answer. 

[BiLKiNiS]

I think it is germany because the main hub for DHL between the west coast and europe is in Frankfurt but you see the value "CN" in the column city of origin, I think it's canada or maybe it is mistaken for China

 

To be frank I expected my order to not be cheap and I'm ok with that but if the tax were payed only once maybe I would do another order later, now this is unlikely considering the increase cost (+52% than the listed price on the website)

 

I really really don't like the north american way of displaying the price without tax, it's deceiving to the customer

[Stonelesscutter]

8 hours ago, No_dice said:

The same thing happend to me, i bought 3 shirts, and was charged an extra VAT of  30€ In order to recieve my package. 
also from germany, instead of canada. 
I contacted ltt support , week later still no answer. 

I'm sure they'll get back to you any moment and will make things right for you. So far I've never had any problems when dealing with their support. It just takes a while sometimes.

7 hours ago, BiLKiNiS said:

I think it is germany because the main hub for DHL between the west coast and europe is in Frankfurt but you see the value "CN" in the column city of origin, I think it's canada or maybe it is mistaken for China

 

To be frank I expected my order to not be cheap and I'm ok with that but if the tax were payed only once maybe I would do another order later, now this is unlikely considering the increase cost (+52% than the listed price on the website)

 

I really really don't like the north american way of displaying the price without tax, it's deceiving to the customer

I also despise the fact that tax isn't included in the listed prices. It trips me up every time. You think you're purchasing something for a nice nearly round number like 69.99 but then suddenly an additional amount is charged on top and and it's not a nice nearly round amount anymore. To be honest, at the prices LTT is charging for certain items, I would expect the taxes to already be included. Certain things on the store are decent or good value, but other things are just not. The WAN pants for example are significantly overpriced, but I digress.

[BiLKiNiS]

here are some information that was provided to me by Nick Light on twitter

https://www.lttstore.com/pages/statement-on-taxes-in-europe-uk-and-norway

 

my understainding is that for order more that 150€ shoppify should not charge the VAT for order to the EU but it's not working

for order less that 150€ it should charge the tax but then the importing services should not but some do anyway because they don't manage the new IOSS correctly

[Stonelesscutter]

In other words, it's a mess all around.

[trag1c]

21 hours ago, Stonelesscutter said:

I also despise the fact that tax isn't included in the listed prices. It trips me up every time. You think you're purchasing something for a nice nearly round number like 69.99 but then suddenly an additional amount is charged on top and and it's not a nice nearly round amount anymore. To be honest, at the prices LTT is charging for certain items, I would expect the taxes to already be included. Certain things on the store are decent or good value, but other things are just not. The WAN pants for example are significantly overpriced, but I digress.

This is a North America thing and perhaps a e-commerce site thing as well. Very rarely do goods and services have the taxes built into the price. In Canada, the only thing off the top of my head that I can think of that has the taxes built into it is the price is fuel. Some e-commerce platforms also handle localization with varying degrees of success. Even for handling different states/provinces where taxes can differ, some ecommerce platforms can choke.

[vismajor]

On 3/24/2022 at 11:47 PM, Stonelesscutter said:

I'm sure they'll get back to you any moment and will make things right for you. So far I've never had any problems when dealing with their support. It just takes a while sometimes.

I also despise the fact that tax isn't included in the listed prices. It trips me up every time. You think you're purchasing something for a nice nearly round number like 69.99 but then suddenly an additional amount is charged on top and and it's not a nice nearly round amount anymore. To be honest, at the prices LTT is charging for certain items, I would expect the taxes to already be included. Certain things on the store are decent or good value, but other things are just not. The WAN pants for example are significantly overpriced, but I digress.

This is really frustrating indeed, when i was living in the US i flipped out on this.

I remember once in Whataburger i was a bit drunk and i made this joke to them.
Hey, i got 5 dollars, how much is a milkshake?

Sir, its 4.99
Okay i want a milkshake.
Alright sir, that'd be 5.32 dollars.
Here, keep the change.
Sir, its only 5 dollars you gave me-
Yeah i know, i said i got 5 bucks and you said a vanil shake is 4.99 so we are even.

 

  

On 3/25/2022 at 9:35 PM, trag1c said:

This is a North America thing and perhaps a e-commerce site thing as well. Very rarely do goods and services have the taxes built into the price. In Canada, the only thing off the top of my head that I can think of that has the taxes built into it is the price is fuel. Some e-commerce platforms also handle localization with varying degrees of success. Even for handling different states/provinces where taxes can differ, some ecommerce platforms can choke.

 

It would be funny if they wouldn't include taxes on fuel. The prices in the billboard and the price you'd pay would have nothing in common

[BiLKiNiS]

On 3/25/2022 at 9:07 AM, BiLKiNiS said:

here are some information that was provided to me by Nick Light on twitter

https://www.lttstore.com/pages/statement-on-taxes-in-europe-uk-and-norway

 

my understainding is that for order more that 150€ shoppify should not charge the VAT for order to the EU but it's not working

for order less that 150€ it should charge the tax but then the importing services should not but some do anyway because they don't manage the new IOSS correctly

Update for me, the ltt support has refunded me the 20% VAT that was added at checkout (it shouldn't have happen since the total amount was superiour to 150$)

 

so everything is good for me

[BiLKiNiS]

On 4/12/2022 at 10:17 AM, BiLKiNiS said:

Update for me, the ltt support has refunded me the 20% VAT that was added at checkout (it shouldn't have happen since the total amount was superiour to 150$)

 

so everything is good for me

after a quick test, shoppify still add a 20% taxe to an order to the european union even if the total amount is superior to 150€/$ so if you do wish to order you will have to pay VAT twice and wait for ltt support to refund you but because de change between USD and EUR will have change between the order and the refund you might gain or loose some money