UK VAT and Custom's Duty

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My shop is UK is based in and selling mainly to UK/EU customers. If I sell a product from outside the EU, sourced through say Oberlo or perhaps Aliexpress how is UK VAT and Custom's Duty accounted for when the product sales price is over the UK VAT and Customs thresholds?

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Shopify Staff
Shopify Staff
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Hi, Jon.

 

Dallas here from the Social Care Team at Shopify.

 

Great question. When it comes to what your customers pay, however, that will be entirely up to what you decide.

 

With drop shipping, the transaction from your customer and the transaction for the product with oberlo are actually separate. In that case, you would charge your customer the price that you choose.

 

Say it costs 5 Pounds on Oberlo, and you want to include all that extra fees, taxes, and markup for profit, and you choose to charge your customers 20 Pounds that is what your customers will pay you, and that is what will end up in your payout. Then from there, you will go over to Oberlo where you will use your credit card to pay the 5 Pounds to send that product to your customers.

You will be using your credit card, but since you received money from your customers already, you are still making that profit.

Therefore you can charge your customers what you want to/need to charge them on your actual store. Does that make sense?

 

When you import a product to your store, you can add a mark up in Oberlo before you import to Shopify. That would be found on the Import List under Variants on the Oberlo app.

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Alternatively, if you would prefer to adjust this on the Shopify side you can do so by going to Products > Click the Required product and then changing the price in there.

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For any technical questions, however, into what you should be charging them for VAT should be directed to a local tax professional. They will have more direct information in regards to that aspect.


If any of this doesn't make sense or if you have any more questions, please let me know. I am happy to help!

 

Cheers,
Dallas.

Dallas | Social Care @ Shopify
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New Member
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First of all thank you for getting back to me again. It is nice to know
Shopfiy do take an interest in their customers problems/queries and do
at least try to help.

Secondly my apologies for not explaining my query to you more clearly
(although I thought I had. More than once!). Please let me try again by
responding to your comments below:

> Hi, Jon.
>
> Dallas here from the Social Care Team at Shopify.
>
> Great question. When it comes to what your customers pay, however, that will be entirely up to what you decide.
>
> No idea what you are referring to here. Of course I know what my customer should pay and if I ever asked that question, apologies again.
>
> With drop shipping, the transaction from your customer and the transaction for the product with oberlo are actually separate. In that case, you would charge your customer the price that you choose.
>
> So? I know that and understand that already. It has nothing to do with my query!
>
> Say it costs 5 Pounds on Oberlo, and you want to include all that extra fees, taxes, and markup for profit, and you choose to charge your customers 20 Pounds that is what your customers will pay you, and that is what will end up in your payout. Then from there, you will go over to Oberlo where you will use your credit card to pay the 5 Pounds to send that product to your customers.
>
> My point simply is that taking your example above, when the product reaches a UK 'port of entry' it will become subject UK/EU VAT @ 20% (products of higher value may also be subject to UK/EU customs duty) So the price to the customer becomes 24.00 GBP. As explained to your colleague, we are a small UK dropshipper and not registered in the UK for vat (as with many other ' small one man band' dropshippers). How we need to work at present is that when our customer takes delivery of the goods from the post office or carrier he or she is responsible for paying the VAT and any duty required.
>
> Ebay for example make this clear on their shop pricing page with the statement: 'INTERNATIONAL ITEMS MAY BE SUBJECT TO CUSTOMS PROCESSING AND ADDITIONAL CHARGES. ' OR '' CUSTOMS SERVICES AND INTERNATIONAL TRACKING PROVIDED', Not very clear perhaps, and sometimes in very small print, but at least its there! On Amazon and Aliexpress however I see no reference to this.
>
> So my question was simply is there any system built in with shopfiy/oberlo that addresses this situation or do I just have to carry on doing what I'm doing?
>
> Again on ebay:
>
> INTERNATIONAL DELIVERY - items may be subject to customs processing depending on the item's declared value.
>
> Sellers set the item's declared value and must comply with customs declaration laws.
>
> AS THE BUYER, YOU SHOULD BE AWARE OF POSSIBLE:
>
> - DELAYS from customs inspection.
>
> - IMPORT DUTIES and taxes which buyers must pay.
>
> - BROKERAGE FEES payable at the point of delivery.
>
> Your country's customs office can offer more details, or visit eBay's page on international trade [1].
>
> You will be using your credit card, but since you received money from your customers already, you are still making that profit.
>
> Therefore you can charge your customers what you want to/need to charge them on your actual store. Does that make sense?
>
> No. Nothing what-so-ever to do with my query
>
> When you import a product to your store, you can add a mark up in Oberlo before you import to Shopify. That would be found on the Import List under Variants on the Oberlo app.
>
> So? Once again nothing what-so-ever to do with my query
>
> Alternatively, if you would prefer to adjust this on the Shopify side you can do so by going to Products > Click the Required product and then changing the price in there.
>
> So? Once again nothing what-so-ever to do with my query
>
> For any technical questions, however, into what you should be charging them for VAT should be directed to a local tax professional. They will have more direct information in regards to that aspect.
>
> So? Once again nothing what-so-ever to do with my query
>
> If any of this doesn't make sense or if you have any more questions, please let me know. I am happy to help!
>
> Sorry Dallas but none of your reply makes any sense to me as once again it does not address my question in any way. It looks like you have a standard set of responses on a basic subject regardless of the question asked!
>
> Anyway Dallas I think it is pointless to continue with this
> as after spending some time yesterday looking at oberlo I found that on almost every occasion I looked at a produce on oberlo, I could but it for less on ebay or Amazon, sometimes a lot less. Also if I was to follow the oberlo suggested selling prices, I would be selling sometimes at 3 time the price the similar or same product was selling for on ebay. For this reason I will be looking for alternative product sources.
>
> Anyway Dallas, thank you for trying



Links:
------
[1] https://pages.ebay.co.uk/help/policies/importation.html
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