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Where Taxpayers and Advisers Meet

Importing from China and exporting to Croatia

Vacker
Posts:1
Joined:Fri Sep 14, 2018 9:43 pm
Importing from China and exporting to Croatia

Postby Vacker » Fri Sep 14, 2018 9:48 pm

Hello
I have been asked by a Chinese supplier if I will forward goods to a customer in Croatia as apparently that customer cannot import directly from China. They have offered to pay me a fee of 10% of the value of the goods. They will pay the Chinese supplier, the goods will be delivered to me and I will then arrange for delivery onwards to Croatia.
The goods (mosquito repellent bracelets) are worth $1,800 with a shipping cost (By TNT) of $1,560. These goods will then be dispatched to a VAT registered business in Croatia. I understand that I can zero rate these supplies for VAT purposes as they’re being sent to a VAT-registered business in another EU country.
As an importer I pay Import VAT. I can reclaim this VAT in my tax return. As an exporter to an EU country I fulfil the criteria for having my goods zero-rated, thus I won’t charge my customer in Croatia VAT. I also have to pay import duty
The GBPUSD rate for a delivery in September is 1.2909. This is from the HMRC website: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/737054/exrates-monthly-0918.csv/preview
Therefore the goods are worth £1,394.37 and the delivery is £1,208.45
I have previously ordered these bracelets to sell myself, and on my delivery TNT split the delivery into 70% for delivery from China to the UK and 30% from the UK port to my address. 70% of £1,208.45 is £845.91
Thus my Value for Duty is £1,394.37 + £845.91 = £2,240.28. I pay duty at 6.5% on this, so £145.61
My Value for VAT is the VFD + 6.5% duty + remaining delivery costs, so £2,240.28 + £145.61 + £362.54 = £2,748.42, so I pay VAT of £549.68
On my previous invoice from TNT there was a “VAT Adjustment” as well. I don’t know what causes this? Can anyone advise? It was only £6.25
I believe I need to charge the Croatian supplier as follows, with cleared funds to be received before forwarding the goods:
£139.43 – the 10% fee as agreed
£145.61 – the import duty
£XXX – the cost of delivering the good from UK to Croatia (to be confirmed)
Is there anything else I need to consider before proceeding with this?
I would be very grateful for any advice on this, thank you

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