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Jamie-Law
Jamie-Law, Solicitor
Category: Law
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Experience:  Solicitor
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I am considering setting up a drop shipping business selling

Resolved Question:

I am considering setting up a drop shipping business selling products from Japan - in essence, the customer will place an order for the product on my website based in the UK, I will take a cut as profit, pay the supplier, who will then ship the product directly to the customer. What are the legal implications of this, including taxation?
Tanks
A
Submitted: 8 months ago.
Category: Law
Expert:  Jamie-Law replied 8 months ago.

Hello my name is ***** ***** I will help you.

To be clear they are shipped from Japan to the UK?

Customer: replied 8 months ago.
the products (tea powder) are shipped directly from Japan to the customer in the UK.
Expert:  Jamie-Law replied 8 months ago.

Ok - the customer may be liable for VAT and import duty depending on how much the order (plus postage) is.

Therefore if the products are subject to VAT and import duty the customer may have to pay that, with a surcharge depending on the carrier.

In terms of your tax, you would need to declare it as income and may have to pay tax if its above the thresholds:

Personal AllowanceUp to £11,000 - 0%

Basic rate£11,001 to £43,000 - 20%

Higher rate£43,001 to £150,000 - 40%

Can I clarify anything for you about this today please?

Customer: replied 8 months ago.
In terms of customs tax - what are the thresholds for this, is there any exception for tea products, and who would be liable to pay?
Expert:  Jamie-Law replied 8 months ago.

Duty is not charged if the value, i.e. the value of the goods excluding shipping and insurance cost, does not exceed £135. VAT is not charged if the value does not exceed £15.

Does that clarify?

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