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bigduckontax
bigduckontax, Accountant
Category: Tax
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, I've tried searching high and low on the HMRC website

Resolved Question:

Hi,
I've tried searching high and low on the HMRC website for a clear cut answer... to no avail.
My situation is thus:
Over the last 8months or so, I've purchased a range of sample goods from China (in small quantities >£150 per order) all of which have arrived as 'gifts' despite my requests for the correct disclosure of the goods to be stated on the parcels.
I have personally bought these items, however, I now wish to sell these to my start-up business (business not yet active and non VAT registered). How do I go about paying the correct VAT/duty due (if indeed applicable).
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
On importation HMRC may charge import duty and VAT. It is not unusual for imports to arrive at the recipient's with no charges at all. If no duty/VAT has been charged there is nothing due to HMRC on importation. Had anything been due to HMRC the goods would have been withheld until the account was settled.
There is nothing else to do, you have been fortunate. Emulate Brer Fox 'For he lay low and say nuffin!'
I do hope I have set your mind at rest on this matter.
Expert:  bigduckontax replied 2 years ago.
I feel your rating totally unfair.
It is perfectly normal for goods to clear Customs with no duty or VAT applied and I have told you what you should do in that event.
Nothing is due to the UK Government. Please don't shoot the messenger.
I suggest that your rating should be raised one point.
Customer: replied 2 years ago.

Hi,

i attempted to reply, however, it seems not to have registered?!

so here goes take two....

firstly, i answered poor purely due to the fact that i have received the same information from 'non qualified' web users (free), and was hoping for a more clear cut answer than 'you're fortunate'.

as a start up business i dont want to get anything wrong -especially regards taxation.

additionally, my main question of how to go about selling said stock to my business (whilst ticking all tax boxes) remains unanswered.

Expert:  bigduckontax replied 2 years ago.
You are not doing anything wrong over taxation. These things happen with imports daily right across the board.
Do not forget to register with HMRC as self employed if that is to be your trading forum. Once notified they will send you a self assessment tax return for completion at the tax year end.
I assume from the tenor of your question that you have bought the stock personally. To get in into the business merely reimburse your personal account from the business account. The book keeping postings would be; debit Stock, credit cash/bank.
Customer: replied 2 years ago.

whilst i am aware this sort of thing happens daily, i dont want to be the one who's caught out.

From my readings, the gov.uk website makes it repeatedly clear that all imports must be declared! -but fail to say precisely where and how?!!!

However, having done the maths (correctly, i think?!), the same total value of tax will still be due and payable through the profit, regardless of having paid any initial import VAT (minus import duty though! -should i be concerned about this?) -am i right???

To confirm, i will not receive a bill nor fine from HMRC by following your above approach? and i have not done anything wrong by receiving non declared goods for resale (ie 'gifts')?

sorry to go on, but as i've previously suggested, i want to be absolutely sure its right!

Expert:  bigduckontax replied 2 years ago.
They are declared automatically on importation when they clear Customs. You will not get 'caught out' as you suggest. You will not receive a bill later. If there is to be a bill it will have to be settled before the imports are released.
When you import, import duty becomes part of the cost of sales. VAT becomes either an input tax which can be reclaimed if your business is registered for VAT or a further cost of sale if it is not so registered.
If no duty or VAT is charged on import then you have no further tax involvement with that consignment save for the Income Tax for which you are liable on the profit you make on resale.
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