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Post by scrappydo on Dec 31, 2020 0:14:54 GMT
What bad news to wake up to. Direct sales tax for international purchases has already come in in New Zealand (and I think Australia has a similar system). Previously, only higher value purchases were stopped and you had to pay GST (15%). From December 2019 a new requirement was brought in that overseas retailers selling digital or physical products and earning more than $60,000 a year from New Zealand shoppers have to collect GST at the point of sale. So the bigger companies like Amazon, Etsy and Ali Express already do this. A lot of smaller sellers don't though - and sometimes parcels are stopped and GST is collected at the border and sometimes they just get through. I was kind of grateful that smaller vendors hadn't been doing this and to some degree, had been avoiding paying this... but with the population of the UK, it's inevitable that they'll have to change and I'm guessing most won't and just close the doors 😭
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Post by glenys on Dec 31, 2020 6:05:42 GMT
You can add Kerri Bradford to the list...
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Post by peachiceteas on Dec 31, 2020 17:08:36 GMT
You can add Kerri Bradford to the list... I couldn't find an announcement for her. Is it just UK or EU too?
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Post by anniefb on Dec 31, 2020 20:47:05 GMT
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Post by peachiceteas on Dec 31, 2020 20:48:59 GMT
Thank you for sharing - I didn’t think to check Facebook!
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Post by scrapaddict702 on Jan 1, 2021 4:34:09 GMT
Well now, not all 50 states have sales tax! I happen to border a non sales tax state and my poor mother looks like a hoarder because I have all manner of shipments delivered to her. Seriously though, I don’t fully understand what is happening, but it sucks rocks for you guys and I am sorry! Excuse our socialist ways for having VAT in all EU countries (we're rude like that). What happened is that the European representatives voted years ago to implement a sales tax-collecting system due to the loss in collection because of international (non-EU) e-commerce the EU is suffering. It was estimated at the time around 5 billion € per year (6.13 billion US dollars). It has gone up since, especially in this pandemic year. To do this, a simple system was put in place where businesses from other countries that are not implemented in the EU have to simply file for a registration and collect tax directly from their EU customers which they then proceed to send back to the EU countries. Like it's happening in the US for the socialist-adjacent states. This is a system that has been communicated about for a while now so that vendors could prepare. It goes into effect on July 1st 2021 and I believe they started encouragining non-EU vendors to register in 2019. That's 18 months of margin, should be plenty enough. With Brexit happening, the UK would suddenly no longer fall under this change in system (which they voted for as they were EU members at the time). So they quickly came up with a similar system that goes into effect on January 1st. I understand this extra and sudden chaos would cause vendors to back away from selling to UK customers until they can get this sorted internally (it requires registration + updating the system to handle the VAT collection for UK sales). But all in all, it looks more like scrappy businesses are forgoing the whole process altogether now and just giving the middle finger to UK and EU clients. Some, like FYC, have decided to simply cut off ALL internationals besides Canadians which is just bonkers. Expect the rest of the world to follow through with registration + direct sales tax collection. It's the way forward with the ever increasing importance of global e-commerce sales. I don't get why vendors are being stubborn about this since they had plenty of warning in advance to prepare for this change. Also, no more duty collection with heavy administrative fees for their customers which should automatically push some of them into buying more since the risk of getting slapped with 20€ in collection fees (on top of the actual VAT) will disappear. Anyhoo, inner Grinch unleashed. This is really interesting. I wonder then if things will change for smaller businesses down the line if/when programs are set up to make this process easier to handle and that this could be a temporary hiccup. If the small crafty businesses lose enough business, I'm sure they'll be motivated to learn how to find a manageable way to integrate it into their business model. These scrapbook companies actually don't collect sales tax for states other than their own, so this isn't something they're currently set up to handle even in the US. I don't know the specifics because I don't have a need to know them, but there are some workarounds in the law that allow them to avoid having to collect sales tax country wide if they meet certain criteria.
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Post by glenys on Jan 2, 2021 1:35:02 GMT
peachiceteas Colorcast Designs - an email I received this morning.... Hi Crafty Friends! Happy New Year! I just wanted to drop in quickly and let you all know of some changes effective today for international shipping. Due to new tax rules for 2021, I will no longer be able to ship to the UK. I am so sorry for this, I wish there was a better solution for small businesses to ship there. I will continue looking for other options. In addition, starting July 1, 2021 (unless I find a way to over come this), I will not be shipping to Europe (roughly 30 countries are included) as they are taking on similar tax changes. Please know that this breaks my heart as I love all of my international customers and wish there was a better option for us small business owners selling internationally. I will keep you all updated if I find another option.
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Post by scrappydo on Jan 2, 2021 1:59:18 GMT
Elise's (FYC) response to an email I wrote asking if she would reconsider shutting off NZ and Australian customers.... sadly, no.
"thank you for taking the time to reach out, I understand your disappointment and appreciate your support in the past several months.
I realized late last night that in my many drafts of the announcement, I ended up accidentally omitted one of the other large factors that played a part in my decision. The always increasing shipping charges, mail delays, and suspensions also brought on this change I wasn't expecting to enforce in the coming year. Unfortunately shipping to Australia and New Zealand is the most expensive and those costs are subsidized by me. Every single customer is important no matter where they are located, but it's more important to make sure I'm using the available time and resources to run my business with care while providing quality products. Again, I sincerely apologize and wish you well in the new year. Best, Elise"
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Post by glenys on Jan 2, 2021 6:48:23 GMT
Elise's (FYC) response to an email I wrote asking if she would reconsider shutting off NZ and Australian customers.... sadly, no. "thank you for taking the time to reach out, I understand your disappointment and appreciate your support in the past several months. I realized late last night that in my many drafts of the announcement, I ended up accidentally omitted one of the other large factors that played a part in my decision. The always increasing shipping charges, mail delays, and suspensions also brought on this change I wasn't expecting to enforce in the coming year. Unfortunately shipping to Australia and New Zealand is the most expensive and those costs are subsidized by me. Every single customer is important no matter where they are located, but it's more important to make sure I'm using the available time and resources to run my business with care while providing quality products. Again, I sincerely apologize and wish you well in the new year. Best, Elise" Not sure what suspensions she is talking about. I am not aware of any suspension in mail service to or from Australia or New Zealand this year. Why is she subsidising these costs? Why not let the customer decide? If someone in Australia or New Zealand is willing to pay the shipping costs, why not let them?
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Post by peachiceteas on Jan 2, 2021 8:34:28 GMT
This is what I mean when I say FYC customer service sucks.
I just cannot with the way she chooses to phrase her words. I don’t know if I am reading a tone that isn’t there but it doesn’t sit right with me.
Nobody asked her to subsidise costs for Australia and New Zealand. Let the customer make their own decisions.
I think these businesses are underestimating the value that internationals bring to their brand. I’ve unfollowed everyone on social media I can no longer purchase from - there’s no point me supporting them in any way when they won’t take the steps to have me as a customer.
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Chinagirl828
Drama Llama
Melbourne, Australia
Posts: 6,469
Jun 28, 2014 6:28:53 GMT
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Post by Chinagirl828 on Jan 2, 2021 10:26:59 GMT
Nobody asked her to subsidise costs for Australia and New Zealand. Let the customer make their own decisions. I think these businesses are underestimating the value that internationals bring to their brand. I’ve unfollowed everyone on social media I can no longer purchase from - there’s no point me supporting them in any way when they won’t take the steps to have me as a customer. Yep, I unfollowed FYC yesterday. There's no point looking at her products when she has made it very clear she doesn't want my business.
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Post by hop2 on Jan 2, 2021 12:17:07 GMT
Elise's (FYC) response to an email I wrote asking if she would reconsider shutting off NZ and Australian customers.... sadly, no. "thank you for taking the time to reach out, I understand your disappointment and appreciate your support in the past several months. I realized late last night that in my many drafts of the announcement, I ended up accidentally omitted one of the other large factors that played a part in my decision. The always increasing shipping charges, mail delays, and suspensions also brought on this change I wasn't expecting to enforce in the coming year. Unfortunately shipping to Australia and New Zealand is the most expensive and those costs are subsidized by me. Every single customer is important no matter where they are located, but it's more important to make sure I'm using the available time and resources to run my business with care while providing quality products. Again, I sincerely apologize and wish you well in the new year. Best, Elise" Not sure what suspensions she is talking about. I am not aware of any suspension in mail service to or from Australia or New Zealand this year. Why is she subsidising these costs? Why not let the customer decide? If someone in Australia or New Zealand is willing to pay the shipping costs, why not let them? I know that in May or June Japan my DD tried sending mail to Australia from Japan and could not. My DD had to send a box of her friends things there but couldn’t, so she sent it. I wouldn’t have any idea that there had been a suspension if DD hadn’t tried to send something at that point. Also when DD was packing up in June she could only send her boxes home via surface mail, taking a month or more. So at the beginning of the pandemic there were definitely issues.
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Post by glenys on Jan 2, 2021 13:21:27 GMT
Not sure what suspensions she is talking about. I am not aware of any suspension in mail service to or from Australia or New Zealand this year. Why is she subsidising these costs? Why not let the customer decide? If someone in Australia or New Zealand is willing to pay the shipping costs, why not let them? I know that in May or June Japan my DD tried sending mail to Australia from Japan and could not. My DD had to send a box of her friends things there but couldn’t, so she sent it. I wouldn’t have any idea that there had been a suspension if DD hadn’t tried to send something at that point. Also when DD was packing up in June she could only send her boxes home via surface mail, taking a month or more. So at the beginning of the pandemic there were definitely issues. That issue was apparently a Japan Post one, not an Australian one. There has been no suspension between Australia and the US. I’ve been ordering from Feed your Craft all year and the orders have all arrived in much quicker time than most other US companies. Im not too worried for myself, as there are many other companies still taking money from Australian customers. It is a shame for UK customers, who seem to be getting cut off by many companies. But then, on the other hand, companies such as Studio Calico and Ali Edwards haven’t even mentioned it. How can it not affect them too?
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Post by peachiceteas on Jan 2, 2021 13:42:47 GMT
But then, on the other hand, companies such as Studio Calico and Ali Edwards haven’t even mentioned it. How can it not affect them too? I think it does affect them. It's just whether they're going to do anything about it or hope to fly under the radar - most likely the latter. It's in my best interest that they continue to ship (whether they're being legally compliant is not my problem) - for myself and all the UK crafters who would be lost if AE and SC cut us off too.
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Post by happyscrappydo on Jan 2, 2021 14:23:43 GMT
Did Felicity Jane say anything? Her website still says that the international customers are responsible for taxes and duties. In this system there is no choice? Customs have to be paid at the time of purchase, correct?
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Post by happyscrappydo on Jan 2, 2021 14:27:40 GMT
But then, on the other hand, companies such as Studio Calico and Ali Edwards haven’t even mentioned it. How can it not affect them too? I think it does affect them. It's just whether they're going to do anything about it or hope to fly under the radar - most likely the latter. It's in my best interest that they continue to ship (whether they're being legally compliant is not my problem) - for myself and all the UK crafters who would be lost if AE and SC cut us off too. They are charging USA taxes so maybe they can charge VAT, did anyone try to make a purchase and see if the VAT is charged at the time of purchase? I hope that them being slightly bigger than some other smaller companies, they can figure out software and registrations so UK and EU customers continue buying US designs. I assume ACOT and scrapbook dot com should be fine, they are bigger.
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Post by peachiceteas on Jan 2, 2021 14:40:40 GMT
I think it does affect them. It's just whether they're going to do anything about it or hope to fly under the radar - most likely the latter. It's in my best interest that they continue to ship (whether they're being legally compliant is not my problem) - for myself and all the UK crafters who would be lost if AE and SC cut us off too. They are charging USA taxes so maybe they can charge VAT, did anyone try to make a purchase and see if the VAT is charged at the time of purchase? I hope that them being slightly bigger than some other smaller companies, they can figure out software and registrations so UK and EU customers continue buying US designs. I assume ACOT and scrapbook dot com should be fine, they are bigger. When I checked out on my order yesterday, VAT was not charged at point of purchase.
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Post by Really Red on Jan 2, 2021 14:52:54 GMT
I am so sorry. SO frustrating.
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Post by happyscrappydo on Jan 2, 2021 15:30:27 GMT
Even with all the advanced communications, it does not look like USA scrapbooking companies could get ready. Hopefully in the upcoming months it will get clearer on what is required to be compliant. I cannot imagine that the loss of international customers would not be an impact for any of these small businesses.
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Post by hop2 on Jan 2, 2021 15:42:08 GMT
Stupid question, if businesses do not collect the VAT what repercussions could they face? I mean if the company is here in the US how could the UK enforce that? It’s your law not ours so I don’t get how they plan to enforce it.
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Post by peachiceteas on Jan 2, 2021 19:37:24 GMT
Stupid question, if businesses do not collect the VAT what repercussions could they face? I mean if the company is here in the US how could the UK enforce that? It’s your law not ours so I don’t get how they plan to enforce it. Very good question! One I have absolutely no idea the answer to. I think many of the scrapbooking US retailers could get away with not charging VAT - in the same way that SC always mark packages low on customs - as they are a small fish in a gigantic pond in the grand scheme of things.
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Post by hop2 on Jan 2, 2021 20:09:35 GMT
Stupid question, if businesses do not collect the VAT what repercussions could they face? I mean if the company is here in the US how could the UK enforce that? It’s your law not ours so I don’t get how they plan to enforce it. Very good question! One I have absolutely no idea the answer to. I think many of the scrapbooking US retailers could get away with not charging VAT - in the same way that SC always mark packages low on customs - as they are a small fish in a gigantic pond in the grand scheme of things. Well this was my DD’s question as she was grappling with her little teeny tiny art shop. She was like most of my stuff is small, letter sized items, how would they even know it was a purchase. I’m like there’s an electronic purchase record to prove it so, eventually, they might catch up. My guess is that my DD will ignore it until she gets an order, she’s only ever had 1 from UK and a few from EU, ( which she has 6 months to figure out anyway ) maybe by then square space will have it figured out. The thing is, wouldn’t the government have an easier time collecting from their own citizens, whom they could just tax. What exactly would the UK do to a small business here? They can’t just tax us.
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Post by sleepingbooty on Jan 2, 2021 20:51:10 GMT
The thing is, wouldn’t the government have an easier time collecting from their own citizens, whom they could just tax. What exactly would the UK do to a small business here? They can’t just tax us. Businesses are not being taxed. They're being asked to collect tax for their (UK and then EU) customers. That's very different. The system as it stands is not holding up: how would they collect sales tax from sales made abroad from their own citizens? It's the random pull at the customs technique right now and it's bleeding tax like crazy (over 5 billion euros annually for the EU). It's also costing the EU and UK customers who do get "caught" a lot of money in terms of tax collection fees (I'm paying over 20€ per parcel that they collect tax on just as an administrative fee, totally over it). I think the mentality from scrappy US businesses here stems mostly from a US-centric post-WW world that is slowly starting to dilute and erode away as a new balance appears. You either get on with it or you are left out. As things stand, the EU (+ UK) market can seem like something part of the scrap industry can do without but in the long run, the loss will be consequential. The scrap industry needs to collectively move into the future and open up or it will continue to bleed losses and grow smaller. American Crafts' Spanish language collection seems to indicate that they're seeing the light albeit quite late. It's really time to embrace the global mindset that has spreading the past couple of decades. Scrapbooking is really behind.
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Post by sleepingbooty on Jan 2, 2021 21:02:40 GMT
Stupid question, if businesses do not collect the VAT what repercussions could they face? I mean if the company is here in the US how could the UK enforce that? It’s your law not ours so I don’t get how they plan to enforce it. Very good question! One I have absolutely no idea the answer to. I think many of the scrapbooking US retailers could get away with not charging VAT - in the same way that SC always mark packages low on customs - as they are a small fish in a gigantic pond in the grand scheme of things. The first phase of reinforcement for the EU will be to ban these businesses from the biggest platforms (Amazon, Ebay) from being allowed to sell in the EU. That's the priority right now. We shall see what happens next but until Biden enters office for the US and the pandemic is under control globally, I don't think the EU will make conditions linked to smaller non-EU businesses any kind of priority in trade deals. We're essentially at the start of the transition and it'll take years to see how these new rules are reinforced and become everyday reality for businesses outside the EU. Again, this has been a long-time coming. I was browsing JSTOR and come across multiple articles on the changes and future of VAT in the EU going back decades (had to awkwardly grimace at seeing those coming from the UK like this 1996 article from Oxford Uni Press, peachiceteas). The rise of the internet has clearly changed things (especially the access to and volume of goods bought directly abroad) but all of this is in line with the long-term EU programme.
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Post by elegantsufficiency on Jan 4, 2021 12:27:46 GMT
sleepingbooty you get it spot on on both of these posts. I stopped ordering from US companies when our local post office wised up to the packages flying under the radar from which they could collect duty. That was fair - I never expected to avoid paying my dues. What I did object to was the flat collection/admin fee, which occasionally was more or less the same if not more than the cost of the package (a monthly PL sub collection, for example) I was paying international postage plus this "customs admin fee" on top of the cost of a few pieces of card. That seemed crazy to me and I switched to buying digital. I think the mentality from scrappy US businesses here stems mostly from a US-centric post-WW world that is slowly starting to dilute and erode away as a new balance appears. You either get on with it or you are left out. Of course, it's more than just scrapbook goods as well, isn't it? The first phase of reinforcement for the EU will be to ban these businesses from the biggest platforms (Amazon, Ebay) from being allowed to sell in the EU. That's the priority right now. I can see this gathering pace for sure. Thanks for explaining it all so clearly and summarising the situation up so well. I'll have to go and read that Jstor article later - but first a cup of tea ;-) (and a spot of lunch <G>)
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Post by peachiceteas on Jan 4, 2021 12:32:53 GMT
Thanks for explaining it all so clearly and summarising the situation up so well. Agreed! Thank you sleepingbooty for sharing your wisdom. I understand it a lot better now - I was completely clueless before!
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Post by sleepingbooty on Jan 6, 2021 15:11:49 GMT
Thanks for explaining it all so clearly and summarising the situation up so well. Agreed! Thank you sleepingbooty for sharing your wisdom. I understand it a lot better now - I was completely clueless before! Why yes, I am your weirdo friend who nerds out on European Union legislation. Glad it was useful for once. I'll try to remember to post in here when I hear more about the possible effects and IRL consequences when the EU VAT change becomes effective in July. Unfortunately, I'm finding it difficult to follow what the UK government is doing right now with the sudden VAT collection legislation or how they're incoporating this in their trade deal negotiations (I mean, Brexit is messy all around).
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Post by elegantsufficiency on Jan 6, 2021 22:23:06 GMT
I mean, Brexit is messy all around). Ugh. Tell me about it. Today's Times newspaper reported on the clampdown on "mostly Chinese" sellers on Amazon and Ebay who have suddenly raised their prices by about 20% - a coincidence that the UK VAT collection has been stepped up in the last couple of weeks, do we think? Rather than offer a specific link (the Times one is behind a paywall), I'll simply suggest googling "Chinese sellers and Amazon" for a variety of opinions on the subject! Thank you for the reader service though, ma'am. Hugely appreciated!
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burnbright
Full Member
Posts: 352
Mar 22, 2019 21:27:33 GMT
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Post by burnbright on Jan 14, 2021 18:24:27 GMT
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Post by peachiceteas on Jan 14, 2021 18:41:25 GMT
Also that Canadians can't buy now because she has to collect GST. Sigh. Now I'm am joining you in the sad corner. I thought it was ridiculous when I read that she's cutting off Canadian customers too!
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