Bits and Pieces - various news snippets.

This will be a short summary of early July news items which don't necessarily warrant a full-blown blog post in their own right.

 

Special Postmarks and First Day Covers

Royal Mail's on-off relaxation of normal rules for obtaining special postmarks on first day covers and other items, previously mentioned in July and November last year, will come to an end on 31 July 2021.  This means that the 22 July Wild Coasts stamps (about which more later) can be sent until the end of the month, but the 12 August Industrial Revolutions issue will be subject to regular rules as detailed in the Postmark Bulletin.    The usual concessions will apply to those (especially overseas) who do not receive the stamps or blank covers by the date of issue, and for Bulletin late announcements.  Always include a note to the SHC manager if this applies.   

And now that we only have one handstamp centre covering the whole country bar London and the Wales and West area, it is even more important to ensure that the instructions in the Bulletin are followed especially regarding having an address on the item to be postmarked and providing a return envelope for covers for each handstamp requested.  (Multiple items can still be enclosed in one larger parcel or box, though.)  Guidance and clarfication from the very helpful people at Tallents House on 0345 071 2000 (os&hs_enquiries@royalmail.com).

Doctor Blade is back!

Ok, it never really went away because it is an integral part of the printing process, but on the Dennis & Gnasher post we have a picture of a booklet with two distinct flaws. 

Major break in value on McCartney Machin.

Jim P has sent some pictures of a nice flaw, which I don't think is constant, on the 50p Machin in the McCartney PSB.  I've added it to the Music Giants V post.

Industrial Revolutions

According to the July Philatelic Bulletin this set consists of six stamps (2nd class, 1st class & £1.70 in se-tenant pairs), and a miniature sheet (2 x 1st class & one each £1.70 and £2.55 in a block of 4).  As well as the usual products there is a Prestige Stamp Book the definitive pane of which contains 3 x 10p, 2 x 5p, 2 x 20p and a single £1.70.  Now to make this useful to dealers as well as collectors, one of the 10p could have been another £1.70 so providing two sets.  But that would have been an expensive book which is £18.03 already.  Anyway, any collector buying for the new stamps alone (the 10p isn't new unless it's somehow different) will only have 55p-worth of postage - plus the special stamps, of course, which includes two pairs of the sheet-origin 1st class.

More details towards the end of this month.

Coin Covers

Two Royal Mail/Royal Mint products have been announced and doubtless they will be on the Royal Mail website ere long.

The Duke of Edinburgh in Memoriam cover will be issued on 19 August.  Bearing the miniature sheet with a special handstamp of the same date, the cheapest cover (in an edition of 10,000) will contain a £5 cupro-nickel coin, and is priced at £19.95.  The Silver Proof cover is £92.50 (750 produced) and the Gold £2,650 (50 produced)  

The second cover marks the 75th anniversary of the death of author H.G.Wells.  The Royal Mint bi-coloured £2 coin has already been criticised for inaccuracies (the tripod creatures have four legs) but it stands (pun itended!) there alongside three of the 1st class Time Machine stamps from Royal Mail's Classic Science Fiction set issued earlier his year.  

The stamps are cancelled with a 13 August Bromley handstamp showing Wells' signature.  There are three bi-coloured coins, cupro-nickel at £19.95, sterling silver part plated in gold (£92.50), and yellow gold + red gold (£1,095).  Quantities are the same as the other cover.

Queen's 95th Birthday cover - pane

Regular followers of Machin sales on that well-known auction site will have seen a single 1st class stamp from this pane realising £62 - because it was mint.  A reader commented on the original thread that the panes were on sale mint at the Stafford Stamp Show for £18 (two dealers were selling) and I saw them on sale at Midpex last Saturday for £25.  The ultimate folly today saw a German dealer sell a mint pane for £365.99 with the underbidder £10 less.   

Value Added Tax and the European Union

Collectors in the EU should by now be aware that rules on importation of small-value items changed from 1 July, in much the same way as they changed in the UK from 1 January.  In short this means that business to consumer sendings are now taxable no matter how low the value of the goods.  Royal Mail explain it on their shop website thus:

What does this mean to our Stamp and Collectibles customers?

Any customer that resides within an EU member state and orders any product from the RM Web shop or any other channel that we offer, since 1st January 2021 may have had to pay additional VAT and handling charges to the local post or parcel delivery company before their orders got delivered to them.

Royal Mail is registered for the IOSS (Import One Stop Shop), so from 1st July 2021 whenever the order placed by our customers meets the conditions for using the scheme, Royal Mail pays the VAT due instead of the customer thus ensuring our customers do not have to pay customs charges (although a few of the national posts / parcel operators may charge a very low fee) and suffer potential delays when receiving their goods.

In effect this means that all goods bought from outside the EU are subject to local VAT.  In practice letters containing a few stamps are - as at present - less likely to be examined and charged by local customs authorities who are likely to be concentrating on bigger fry.

For Norvic Philatelics we continue unchanged.  Customs labels will be added to despatches where required (ie not normally for letters or large letters) and customers in the EU will be treated in the same way as those in any country outside the UK.  Local taxes are the responsibility of the customer.

Note that if you (in the EU) buy from UK sellers on eBay, eBay will automatically add your local VAT to the price you pay in most cases.  Collectors in the UK buying from outside the UK on eBay have the same problem.  The one ray of light is that you no longer have to pay the Royal Mail/Border Force £8 examination charge.

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Changes to Import VAT regulations from 1 January 2021

From 1 January 2021 the United Kingdom government will introduce a new model for the VAT

treatment of goods arriving into Great Britain from outside of the UK. This will ensure that goods from EU and non-EU countries are treated in the same way and that UK businesses are not disadvantaged by competition from VAT free imports.  

From the Gov.uk website (http://tiny.cc/qgv4tz):

For imports of goods from outside the UK in consignments not exceeding £135 in value (which aligns with the threshold for customs duty liability), we will be moving the point at which VAT is collected from the point of importation to the point of sale. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments.

The new arrangements will also involve the abolition of Low Value Consignment Relief, which relieves import VAT on consignments of goods valued at £15 or less.

Online marketplaces (OMPs), where they are involved in facilitating the sale, will be responsible for collecting and accounting for the VAT.

For goods sent from overseas and sold directly to UK consumers without OMP involvement, the overseas seller will be required to register and account for the VAT to HMRC.

 

This appears to imply that if you are in the UK and you buy from a non-UK seller on eBay or Delcampe they, as Online Market Places, will add VAT to the agreed price (and carriage).  However, the devil is in the detail, as a blanket system will not work, and it is difficult to see how any (OMP) could possibly establish systems in the next six weeks.

Sales by non-business sellers to non-business buyers will not be included, and there is some question as to whether (for example) ebay and Delcampe are OMPs for these purposes, reading the detail of 'What an OMP is'.

But it does mean that business sellers, ie dealers, outside the UK will have to register with HM Revenue & Customs and account for and remit UK VAT.  Which means that if you buy low value stamps (ie under the current de minimis levels) consigned through the post, the dealer will charge VAT.  But he will also need to know what rate to charge at, and set up appropriate systems and paperwork, AND know which addresses are counted as Great Britain - and probably Northern Ireland in time although this paper does not cover Northern Ireland. 

We (in the UK) all know that the standard rate is 20% and the rate on books (eg catalogues) is zero - but stamps are NOT 20%, see my 2019 post.

I'm sure this will be debated widely, although there is little time for the philatelic magazines to pick up the story, and get advice.  It will be interesting to see what eBay and Delcampe decide - and how easy it is to contact them to tell them they haven't quite got it right!  Their lawyers will be working on it now, I'm sure!

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VAT refunds on imports

If your interest extends beyond modern stamps bought direct from Royal Mail or the Post

Office, and if you are in the UK and buy from outside the EU, you may have your package intercepted by Royal Mail and subjected to VAT on import, and Royal Mail's handling charge which is currently £8.

This doesn't only apply to stamps and other philatelic products of course, if you think you will save money by buying your iPhone from China or the USA you might be in for a shock!  But sticking to philatelic items, you may not have to pay as much as you think.

What follows is not tax advice and I cannot be liable for things not turning out as you might hope, but this relates what happened with a recent purchase of QE2 postal history from a dealer in the USA.

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I was a little upset that this package was caught for Value Added Tax on import.  Not that it wasn't payable just that it had been caught, because not everything is, even if it's larger than a letter.

I wasn't sure that the VAT had been correctly calculated.  Unusually the US dealer had used a USPS postage form produced at the counter which incorporated a customs declaration - they don't usually use them at all.

The description of the contents was put simply as 'COVER' - I suspect that this was entered by the postal clerk who had asked the sender about the contents.

This of course tells UK Customs nothing; but the declared value of US$50 and postage of $24 was enough for the charge to be raised without examining the contents. I don't know whether they would have charged the same rate if the package had been opened.

VAT was charged at 20%. I looked at the HMRC website and decided that it ought to have been 5%, especially after phoning the VAT help-line. Rather than the usual call-centre type of operative, I had a chat with a chap who appeared to be of mature age, with plenty of experience and happy to chat the options and system through.

Short story long: I applied for a part refund and have received a letter to say that I shall be getting a refund of £9.61 - no, it's not that much, but it was worth the time and effort to establish a principle.

So this is the information at HMRC (my highlighting):

Goods from non-EU countries
If you import goods that you’ve bought from non-EU countries they’re normally charged at the same rate as if they had been supplied in the UK. But if you import works of art, antiques and collectors’ items they’re entitled to a reduced rate of VAT.

Valuation of imported goods
The value for VAT of imported goods is their customs value, determined by the rules in Notice 252, as well as incidental expenses - such as commission, packing, transport and insurance costs incurred up to the goods’ first destination in the UK ....... any Customs Duty or levy payable on importation into the UK any Excise Duty or other charges payable on importation into the UK - except the VAT itself.

Postage stamps and philatelic supplies (VAT Notice 701/8)

5. Philatelic collectors’ items
5.1 VAT liability
Philatelic collector’s items are liable to VAT at the standard rate, but the tax may not always be due on the full value.

5.2 Value for VAT of philatelic supplies treated as collector’s items
[This applies to VAT-registered dealers accounting for sales, so I have omitted it]

5.3 Imported collector’s items
Some items of philatelic interest are eligible for a reduced valuation at importation which gives an effective VAT rate of 5%. This figure is reached by calculating a value for duty using the appropriate duty method, adding any additional costs (see paragraph 3.1 of Imports (VAT Notice 702)) and multiplying the total by 25%. Applying the 20% rate to this value gives an effective VAT rate of 5%.

So the VAT rate itself is not lower, but the value of the goods for the purposes of calculating the VAT is reduced, producing the same result.

CLAIMING THE REFUND
Form BOR286 is dowloaded from the Border Force website. This is a pdf which can be completed manually or on the computer. As you also need to send (original) evidence then you will need to print it anyway.

Supporting evidence is:
- Customs charge label stuck to the package
- Customs declaration form completed by the sender
- invoice/receipt - and, it says 'such as eBay page or PayPal receipt'.

To support the claim I also enclosed photocopies of some of the covers, which were shown on the invoice with thumbnail images.

NOTE: the VAT notice says only that SOME items of philatelic interest are eligible for a reduced valuation. I don't think there is a list or guidance as to what is included and what is excluded.

For instance, GB mint decimal stamps may not be due for any tax being valid for postage, but they MAY be treated differently.  So your experience may be different depending on what you are importing.

UPDATE: Another thought. IF - and only if - the sending is of sufficient value to require a customs form and therefore to attract the attention of Royal Mail's interceptors....

Contact the sender before your order is posted, ask them to endorse the Customs form
"Reduced rate per VAT Notice 701/8, Para 5.3".

That should ensure that you don't have to go through hoops to get the refund that I have today received.

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