P2 Locomotive Company and related matters

Do you think they’ve priced in applicable tariffs in the event of ‘no deal’? Genuine question, not trying to start a brexit argument. Closest information I can find in WTO data suggests a 15% tariff on bits of steam engine which might make the A1 folk’s eyes water a bit…

Simon

 

Surely tariffs would only be enforceable on PO's placed after the fact?

 

Normally tariffs are applied from the date of import, when the goods actually arrive in the country.

 

...and contracts usually specify that the price is exclusive of taxes, tariffs, etc.

 

I might be wrong here, but I’m pretty sure they’re charged when the goods enter a country, not the point the order is placed. On a far smaller scale, but relevant, if you order something online from outside the EU, you don’t pay customs charges on order, and you don’t pay the supplier, you pay the tax authority directly.

It would be somewhat ironic (if I’ve got that wrong) if Mark Allatt has had to bring forward purchasing plans in order to avoid hefty import tariffs, in light of his political stance.

Simon

 

Indeed. Incoterms is a subject unto itself but sometimes the DDP Delivered Duty Paid terms are used. It will depend on what was agreed.

 

Would that be the actual inward shipping date (i.e. landed on these shores) ...... or the few days/weeks/months later, when HMRC's Collector of Taxes eventually decides, in their infinite wisdom, to clear the shipment?

(A tad jaundiced .... ?? )

 

Payable after clearance...obviously

 

Does charitable status have any effect on tariffs etc?

 

Wouldn’t think so.

Simon

 

It has been used in previous years (e.g. Band Aid) to refund VAT to the charities hence creating a precedent that could be repeated.

 

You think that HMRC are bad... You should try in Southern Italy

 

What has VAT got to do with WTO tariffs? I also wish you luck in arguing equivalence between famine aid and the boiler of a steam engine.

Simon

 

Where the charity was extremely politically high-profile, and levying a tariff left the government looking like it was trying to profit from famine relief. As @goldfish says, there is no meaningful equivalence between the two situations. And the politics - which are for another thread - will put many other interests suffering from the effect of changes to the terms of trade (not just tariffs) far ahead of the A1SLT in the political stake, even allowing for Mark Allatt's connections and undoubted PR skills.

 

In a similar "genuine" spirit, will there necessarily be tariffs if 'no deal' happens? I've not heard a lot of details on what will happen in that eventuality; I know the EU has done some contingency planning (but I'm not sure if details have been released), but I'm not sure if HMG has too. My guess is that as things currently stand, legally, the EU would then be classed with the rest of the world, and tariffs applied, but there might be some last minute move to avoid the paperwork nightmare that would cause.

Noel

 

This discussion really belongs elsewhere, but the brief answer is that HMG have to decide what tariffs to levy on imports from outside the UK. They can set them at any level they like, subject to WTO caps. However, whatever rate is set must apply to all countries, and does not have to be reciprocated by those other countries. The only exception to this would be countries with whom the UK has trade agreements registered with the WTO. By definition, this excludes the EU in the event of a "no deal".

 

Customs Duties and Import VAT are payable at the moment the Customs entry is submitted to CHIEF, the HMRC Customs clearance system. This would normally happen on the day of import into the UK.
At present, goods originating from within the EU are deemed to be in Free Circulation so no Duty or Import VAT is payable on arrival.
What will happen post-Brexit is another matter, there are many suggestions however, assuming that Duty and Import VAT are payable, railway locomotives and parts are covered under Chapter 86 of the current UK Customs Tariff and attract Duty at 1.7%.
Unfortunately however, in the notes to this chapter there is an exclusion for items specifically mentioned in Chapter 84 (this is the general machinery chapter), this includes heading 8402 covering Steam Boilers which attract a Duty rate of 2.7%.
In either case VAT at 20.0% is payable but this can be reclaimed via normal Quarterly VAT returns.
As the A1SLT is a charity, there may be an exemption available however I didn't have time to check that at work today.
What many people don't realise though is that VAT is payable on Customs Duties, the only example I know of a Tax on a Tax.

 

Isn't that the same with petrol/diesel? VAT is also paid on the fuel duty.

 

Yes I think you're right, I stand corrected as I hadn't thought of that, taking it further Excise Duty on alcohol and tobacco would fall into the same category.
The Lord giveth and the Government taketh away.....

 

Thank goodness for lifes little certainties, Death , Taxes, Leaks in flat roofs, Racist/sexist comment about the alleged promiscious nature of young females from a western area of mainland Britain...