Why do companies rip off UK customers?

[GaryLaird]

Quite. So why isn't this happening? The more you look into the whole grey business, the more complicated and murky it gets, full of hypocrisy and deceit on the manufacturers' side, lack of resources and what looks like plain blindness from HMRC. UK retailers are pretty helpless victims, piggy in the middle.

Having a bit of retail experience in the far east I can confidently state that the reason you can buy there cheaper is that a). usually local sales tax is a lot less than ours...or even no tax at all and b). overheads are less and/or shops are happy to accept lower profit margins on items they sell. Running a business in most parts of Asia is far cheaper than here in UK, think local taxes - sales and income, employment rates/law, make a big difference on what kind of profit margin keeps a business worthwhile. So companies like Canon and Nikon really can't do much about it. They will try to dissuade Asian distributors selling there goods in EU and no doubt EU distributor will complain bitterly to Canon/Nikon. Through serial numbers they will be able to trace where the grey imports are coming from and cease and desist notices will no doubt be sent BUT at the end of the day Canon/Nikon still make a sale and finding 'good' distributors is not so easy so they would only 'rock the boat' so far. At least in my experience. As to what the UK government can do.....they already employ customs officers and if you import grey goods from outside EU your are legally bound to a sizeable import duty fee which if paid and taken along side shipping costs no longer make the grey import very attractive. Not to mention the question of warranty. What else can they do?

 

[Pound Coin]

Sorry not true.....in the UK we pay a lot of duty. In fact every EU country can be different. The problem with airport shops is that they are ripping you off....and duty free does not mean you pay the 'true price' excluding duty....they are earning excess profits or at least profits that far exceed the likes of supermarkets.

See here https://www.gov.uk/tax-on-shopping/alcohol-tobacco

They are, in the main, generating income that offsets the costs of running the airports and allows for much cheaper flights.

 

[Eloise]

Having a bit of retail experience in the far east I can confidently state that the reason you can buy there cheaper is that a). usually local sales tax is a lot less than ours...or even no tax at all and b). overheads are less and/or shops are happy to accept lower profit margins on items they sell. [...] At least in my experience. As to what the UK government can do.....they already employ customs officers and if you import grey goods from outside EU your are legally bound to a sizeable import duty fee which if paid and taken along side shipping costs no longer make the grey import very attractive. Not to mention the question of warranty. What else can they do?

If imports and customs did their job then (a) shouldn't be an element because as soon as the goods hit UK (or at least hit Europe) the relevant Duty and VAT should be payable. The problem is that (afaik) cameras and other equipment purchased grey import isn't always properly declared so (for example) your D850 might be declared as a "camera" of value "£500" a big difference paying VAT of 20% on £500 (£100) compared with 20% on £3,000 (£600). The problem is that the cost of properly checking every item (or sufficient items to be a deterrent) has been calculated somewhere to be greater than the amount of tax lost to such evasion.

They are, in the main, generating income that offsets the costs of running the airports and allows for much cheaper flights.

You'd have thought the car park charges would be enough to do that ... now that is a UK (maybe the same in other nations) Rip Off.

 

[GaryLaird]

If imports and customs did their job then (a) shouldn't be an element because as soon as the goods hit UK (or at least hit Europe) the relevant Duty and VAT should be payable. The problem is that (afaik) cameras and other equipment purchased grey import isn't always properly declared so (for example) your D850 might be declared as a "camera" of value "£500" a big difference paying VAT of 20% on £500 (£100) compared with 20% on £3,000 (£600). The problem is that the cost of properly checking every item (or sufficient items to be a deterrent) has been calculated somewhere to be greater than the amount of tax lost to such evasion..

Totally agree. I cant see a scenario which would allow cost effective duty checks on everybody's luggage at airports, cars at ferry terminals and of course postage/courier shipments. Maybe huge fines as a deterrent

 

[Eloise]

Totally agree. I cant see a scenario which would allow cost effective duty checks on everybody's luggage at airports, cars at ferry terminals and of course postage/courier shipments. Maybe huge fines as a deterrent

The problem with checking luggage at airports would be that most people probably take over £400 (rounded) electrical goods out of the country, so these would have to be registered as temporary exports so as not to have to pay duty on return. Travellers would also have to travel with receipts to ensure not to be charged duty on goods they had already paid duty in too.

 

[Stu Meech]

I'm going to go out on a limb here and predict that anyone who imagines camera gear will be cheaper after the UK leaves the EU will be sadly disappointed.

Yep given alot of items are already more expensive due to weakening of the pound, and we've not even left yet!

 

[HoppyUK]

Having a bit of retail experience in the far east I can confidently state that the reason you can buy there cheaper is that a). usually local sales tax is a lot less than ours...or even no tax at all and b). overheads are less and/or shops are happy to accept lower profit margins on items they sell. Running a business in most parts of Asia is far cheaper than here in UK, think local taxes - sales and income, employment rates/law, make a big difference on what kind of profit margin keeps a business worthwhile. So companies like Canon and Nikon really can't do much about it. They will try to dissuade Asian distributors selling there goods in EU and no doubt EU distributor will complain bitterly to Canon/Nikon. Through serial numbers they will be able to trace where the grey imports are coming from and cease and desist notices will no doubt be sent BUT at the end of the day Canon/Nikon still make a sale and finding 'good' distributors is not so easy so they would only 'rock the boat' so far. At least in my experience. As to what the UK government can do.....they already employ customs officers and if you import grey goods from outside EU your are legally bound to a sizeable import duty fee which if paid and taken along side shipping costs no longer make the grey import very attractive. Not to mention the question of warranty. What else can they do?

"So companies like Canon and Nikon really can't do much about it."

They certainly could, if they were minded. But they're not, and the Japanese companies actually like to have grey sellers as an unofficial channel they can use to moderate inventory levels without impacting key markets where the money is made. They also play exchange rate games by shipping goods to and fro - called 'circular shipping'. They are wholly duplicitous in the whole affair.

Canikon UK etc are wholly owned subsidiaries whose primary purpose is to do what they're told, and manage their local situation for maximum benefit to the Japanese parent company. So long as goods leave the factory gates at the right price, and the production lines keep rolling, nobody cares too much about anything else.

 

[Phil V]

Totally agree. I cant see a scenario which would allow cost effective duty checks on everybody's luggage at airports, cars at ferry terminals and of course postage/courier shipments. Maybe huge fines as a deterrent

This^
Unfortunately, this is the sad truth, unless there’s a solid case for massive fraudulent activity HMRC aren’t likely to chase, and the cost of checking ‘everything’ coming into the country would cost millions.

 

[HoppyUK]

This^
Unfortunately, this is the sad truth, unless there’s a solid case for massive fraudulent activity HMRC aren’t likely to chase, and the cost of checking ‘everything’ coming into the country would cost millions.

True. The stance HMRC seems to be taking, and I do sense a slight stiffening of resolve, is to task the likes of Amazon and ebay with responsibility for ensuring their sellers comply with VAT regs. Easy to do, potentially big reward. However, that won't stop other grey dealers that sell direct, like the one who recently supplied a friend with a Canon camera. I saw the packaging, marked as a toy (lie) from China (lie) value $15 (lie).

On the other hand, if you buy goods from the US, it's almost certain that you'll have to pay duty/VAT on delivery, so it can be done. Maybe there's something in that 'special relationship' after all.

 

[Eloise]

However, that won't stop other grey dealers that sell direct, like the one who recently supplied a friend with a Canon camera. I saw the packaging, marked as a toy (lie) from China (lie) value $15 (lie).

Surely every package is visually checked and goes through a x-ray? Surely they could see (visual inspection) the consignment didn’t originate in China and was a camera not a toy (through x-ray). Once those two facts became obvious the true value would have been easy to determine.

 

[HoppyUK]

Surely every package is visually checked and goes through a x-ray? Surely they could see (visual inspection) the consignment didn’t originate in China and was a camera not a toy (through x-ray). Once those two facts became obvious the true value would have been easy to determine.

The most rudimentary checks would have revealed the tax fraud, but this happens all the time. We read about it every day on here , from Panamoz etc.

This BBC Panormama programme was screened last month, where their reporter bought a load of high-tech goods in China, told porkies on the customs documentation (actually the Chinese salesman did it for him), and sold it all back to himself in the UK, paid for and delivered through Amazon with zero tax. Import duty and VAT evasion is dead easy, and it's rife. You and I could do it tomorrow and make a tidy profit without even leaving our keyboards. Many people do exactly that routinely. Almost nothing gets checked.

http://www.bbc.co.uk/news/business-42143849

 

[Phil V]

Surely every package is visually checked and goes through a x-ray? Surely they could see (visual inspection) the consignment didn’t originate in China and was a camera not a toy (through x-ray). Once those two facts became obvious the true value would have been easy to determine.

There’s millions of tons of containers entering the country daily, they’re barely looked at let alone unpacked.

Your assumption is that these ‘goods’ arrive individually, but they don’t, they’re in sealed containers.