Acting as an agent for shipping.
Discussion
Hi,
We've been approached by a european company to act as an agent in order to post their low value items quickly from our UK warehouse to other UK addresses.
Their products will be shipped in directly from china and paid for by the other company who will also handle all the invoicing etc.
We will be responsible for storing and posting the items only and wondered if there are any vat/tax issues with this?
We will be paid a fee for each item we send.
We've been approached by a european company to act as an agent in order to post their low value items quickly from our UK warehouse to other UK addresses.
Their products will be shipped in directly from china and paid for by the other company who will also handle all the invoicing etc.
We will be responsible for storing and posting the items only and wondered if there are any vat/tax issues with this?
We will be paid a fee for each item we send.
Put me down for an teenth, eh? 
Aside from the obvious questions of do you know what you are shipping, and as long as you have made reasonable endeavours to prove the legitimacy of the goods you are shipping out, then all you are doing is sticking labels on boxes.
Cant see any reasons why HMRC would take any interest in a straightforward money for services thing, as long as the goods are kosher.
Aside from the obvious questions of do you know what you are shipping, and as long as you have made reasonable endeavours to prove the legitimacy of the goods you are shipping out, then all you are doing is sticking labels on boxes.
Cant see any reasons why HMRC would take any interest in a straightforward money for services thing, as long as the goods are kosher.
There's no question about the goods, they're just a product that we can't directly get distribution rights for but this other company can't cheaply post from europe.
Just a little confused as didn't want to in any way get busted for some kind of vat avoidance as they will invoice from the channel islands where the cost of shipping is high relative to the product value (about £10)
Just a little confused as didn't want to in any way get busted for some kind of vat avoidance as they will invoice from the channel islands where the cost of shipping is high relative to the product value (about £10)
Most online vendors ship from the Channel Islands to avoid VAT and suchlike, which means their prices are lower, thus more sales. IIRC, however, this can lead to HMRC taking an interest for avoidance of duty, at a personal level. If you happened to be standing in the gunsight when they came looking, it wouldnt be a great place to be.
I'm not a shipper, but have had small conversations with those who are, and know a guy who makes a good living shipping @rari branded stuff from inside the UK, I think for similar reasons. As long as you have paperwork proving that the goods are taxed in accordance when you re-ship, no problems, as far as I can tell. In that instance, you are acting as a pre-positioning stockroom, so the maths and the laws add up correctly. Hopefully someone who knows the HMRC regs would know which bits of paper to look for.
I'm not a shipper, but have had small conversations with those who are, and know a guy who makes a good living shipping @rari branded stuff from inside the UK, I think for similar reasons. As long as you have paperwork proving that the goods are taxed in accordance when you re-ship, no problems, as far as I can tell. In that instance, you are acting as a pre-positioning stockroom, so the maths and the laws add up correctly. Hopefully someone who knows the HMRC regs would know which bits of paper to look for.
Thinking about this some more... Isn't this what bonded warehouses are for?
Surely if a company in the USA posts items to the UK (all be it low value items) then customs would see them at the point of entry in to the UK and charge VAT if applicable.
Now if those items were shipped in bulk at cost to the UK and the US company picked up the (items at cost so small) VAT bill (and maintained ownership), items being sent (now from the UK) would not be picked up by customs when in reality the VAT should be paid on them (except in this case with low value items)
Surely if a company in the USA posts items to the UK (all be it low value items) then customs would see them at the point of entry in to the UK and charge VAT if applicable.
Now if those items were shipped in bulk at cost to the UK and the US company picked up the (items at cost so small) VAT bill (and maintained ownership), items being sent (now from the UK) would not be picked up by customs when in reality the VAT should be paid on them (except in this case with low value items)
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