Exchange Rate Hits HK Company Customers
The falling pound has had an impact on British bargain hunters making use of a Hong Kong based business.
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by Dave Cross
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Fasttech set up with a mission to sell high volumes of low margin products to foreign countries. As the second largest export market, and the second biggest vape market in the world, the United Kingdom has been flooded with packages over the last few years.
The Hong Kong company listed the accurate value of the contents for orders under $20 in value, but capped the declared value at this level for most orders exceeding it. It was a model copied from non-vape retailers, and copied by the plethora of vape companies set up following Fasttech’s success. It enabled customers to avoid paying VAT on products purchased overseas, something that has frustrated many UK-based vendors and those morally opposed to such activity.
As sterling has dipped due to uncertainty over Brexit negotiations, $20 suddenly became worth more than £15, the cut-off for import duties to be applied to goods. The UK Government says:
Tax and duty
You’ll be contacted by Royal Mail, Parcelforce or the courier company explaining how to pay any VAT, duty and fees for dealing with customs.
They’ll normally hold your parcel for about 3 weeks. If you haven’t paid the fee by then, it’ll be sent back.
VAT
You pay VAT on goods sent from non-European Union (EU) countries and EU special territories (eg the Canary Islands) if they’re:
- gifts worth more than £39
- other goods worth more than £15
- alcohol, tobacco products and fragrances (eg perfume, eau de toilette and cologne) of any value
You have to pay VAT on all goods sent by mail order from the Channel Islands no matter what their value.
You’ll be charged at the VAT rate that applies to your goods. VAT is charged on the total value, including:
- the price paid for the goods
- postage, packaging and insurance
- any duty you owe
Customs Duty
You’ll be charged Customs Duty on gifts and other goods sent from outside the EU if they’re above a certain value. The value includes:
- the price paid for the goods
- postage, packaging and insurance
A thread discussing the matter runs to nine pages on the Fasttech forum – and 35 pages here on Planet of the Vapes. One Facebook vape group has more than 250 posts on the topic.
Nathan2103 wrote: “Just to let others know I spent $20 took around 2 weeks to get to the U.K., now been slapped with a £11 customs fee...would of been cheaper to just buy in the U.K.”
Solutions being offered appear to fall into three camps:
- Buy in the UK instead
- Buy more smaller value orders
- Shut up and pay your tax
As it stands, the short-term value of sterling rests on action to be taken by the Bank of England this week. Governor Carney has a press conference on Thursday, where he is likely to announce a 0.25% rise in interest rates to 0.75%. Market analysts predict this will have a small positive effect on the sterling-dollar rate, but warn that the interest rate rise will need to be followed by a further one or risk sterling falling back against the dollar once more.
Have you been asked for payment before receiving your delivery? Have you changed your purchasing behaviour to shop more in the UK? Why not share your experiences on the Planet of the Vapes forum.
Dave Cross
Journalist at POTVDave is a freelance writer; with articles on music, motorbikes, football, pop-science, vaping and tobacco harm reduction in Sounds, Melody Maker, UBG, AWoL, Bike, When Saturday Comes, Vape News Magazine, and syndicated across the Johnston Press group. He was published in an anthology of “Greatest Football Writing”, but still believes this was a mistake. Dave contributes sketches to comedy shows and used to co-host a radio sketch show. He’s worked with numerous start-ups to develop content for their websites.
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