ADDITIONAL 26% customs duty rate on Imports of Jeans and other goods from the USA
Julie Park, Managing Director
Many EU businesses are grappling with the question of how they can reduce the cost of customs duty on imports of US origin jeans. This follows the announcement that an ADDITIONAL rate of duty of 26% plus the existing 12% (for jeans) will apply as a result of EU retaliatory action in relation to the Byrd Agreement. Basically the EU is able to protect EU businesses by imposing such duties to counteract perceived illegal subsidies given to US businesses. This is effective from 1 May 2013 and also affects the following goods:
- Sweetcorn (uncooked or cooked by steaming, boiling in water, frozen)
- Jeans
- Crane lorries
- Frames and mountings for spectacles or goggles, made from base metal
Depending on the supply chain and commercial set up, there is a range of customs duty reliefs available to businesses to mitigate this customs duty cost. For example if the fabric originates in the EU, its value can be stripped out from the reimported value post manufacturing in certain circumstances. Similarly where lengthy supply chains are in place it may be possible to use the First Sale for Export valuation structure.
For more information on this please contact Julie Park on +44 208 941 9200
London 2012 Olympics – ‘Are you a winner?’
Martyne Pearson, Senior VAT Manager
With the London 2012 Olympics just around the corner we have had a considerable number of questions regarding VAT and Customs Duty.
Many businesses are being impacted by the games and there is an increasing awareness around the associated VAT implications.
Re-supplying Olympic Tickets & Associated Services
One particular area of concern for UK businesses has been around the purchasing and resupply of Olympic tickets, and associated services such as hotel rooms and passenger transport. Even though HMRC have issued guidance on the VAT treatment of such transactions, we are still finding that many businesses are unaware of the implications associated with re-supplying these services. If the services are being resupplied to a private individual or another business for its own use, it is possible that the supplier will be subject to VAT under the Tour Operators Margin Scheme (‘TOMS’). This would include the situation where a member of a corporate group supplies these services to another corporate entity within its group for some form of payment.
TOMS is a special VAT scheme that involves the calculation of VAT on the margin obtained from EU travel supplies. At first glance this might sound attractive to many businesses as VAT is only accounted for on the margin as opposed to the full selling price. However, the scheme does not allow businesses to recover VAT on its purchases associated with the TOMS supply. Businesses falling with the TOMS scheme are therefore stuck with irrecoverable VAT.
The VAT Consultancy has done a considerable amount of work around this issue so are excellently placed to advice you should you have any particular questions or concerns. We have also looked at alternative arrangements which enable in some cases, the irrecoverable VAT to be recovered. For further assistance you can contact myself on 01962 735350.
Overseas Businesses – Get your VAT Back!
Overseas businesses visiting London 2012 will be able to recover the majority of the UK VAT they incur on business costs during their time at the Olympics. The VAT Consultancy can assist with this process, ensuring a refund is received as quickly as possible.
We have been working with businesses such as non-EU broadcasters who will be attending the event this year. Such businesses are able to reclaim all of the UK VAT on costs such as:
- Hire/rental of studio time;
- Hire/rental of outside broadcasting, transport and equipment; and
- Hotel accommodation and subsistence costs.
Corporates who are purchasing tickets and associated services for staff use should also be able to obtain a refund of the VAT incurred. However, business using the tickets for client entertainment purposes will be unable to claim the VAT back for the ‘non-staff’ element.
Reclaiming the VAT incurred will reduce your budgeted costs by 20%. It is definitely an opportunity that shouldn’t be missed.
Please contact Peter Bradshaw, Head of Overseas VAT Recovery on 01962 737068 for further help with this.