Temu Tax

[Taf]

Originally Posted by Taf

Enjoy the lower prices from Temu and AliExpress while you can. I fully expect Rachel "Robber" Reeves to slap some form of tax on their packages coming from China.

I watched a long Sky News report yesterday covering the air transport that the likes of Temu and AliExpress are using to get their goods into the UK.

The reporter said that HM Treasury estimated over £5billion of goods are coming in on these flights. But due to "de minimis" import rules, they don't attract import tax if valued under £135 per package.

HM Treasury estimates that is losing then over £1billion of tax each year, and that number is growing rapidly.

And several High Street outlets have been moaning that people can buy goods at much lower prices from Temu, as the outlets have to pay import taxes. One dress that one outlet sells at around £20, cost only around £5 from Temu or AliExpress, post free.

One outlet mouthpiece said something along the lines of "We need public support, and their purchases from us, in order for us to stay open and trade".

Do we actually owe it to these High Street outlets to enable them to build large profit levels and stay in business?

There should be a level playing field on tax, either neither pay import tax, or both do.

[Inactive Digital]

I'd rather buy from a high street outlet that employs people in this country than a tax-avoiding dropshipper overseas. One contributes to society, the other takes from it.

[nffc]

Personally I think the de minimis idea is sensible.


If someone is buying an item which costs little, maybe under say £50, then the amount of VAT which could be claimed is no more than £10 assuming 20% rate applies.


To do this, you have the hassle of intercepting the transit of the item, getting someone to process the declaration to see how much tax would be due on it, then you have to get in touch with the recipient to reclaim the tax, which involves having somewhere to store the item, and the facilities and system in place to make the contact with the recipient and handle payment, then delivering it on. I suppose they can charge a handling fee for that, but there has to be a mark at which it's worth doing it. Assuming that is about an hour of someone's time at minimum wage (£12 or there abouts) since you'd need the staff to process everything anyway as well as the cost of storage and systems for smaller items the handling fee simply would account to more than the cost of the item.


I am no fan of Temu or any kind of drop shipping outlets as the product is often poor quality.


But the same principle would apply to someone like momox (similar basic idea to musicmagpie - they buy used media from people and sell it dirt cheap on places like amazon to keep it moving), where the product is genuine etc, but then they can easily work around that by blocking up shipments of items, sending it to the UK en masse and then opening it and mailing it out to get around the small packet idea. So it just encourages evasion anyway.


Quite frankly if someone is astute enough to recognise they can get something outside the UK and for less (or it's not available within the UK) than inside unless they're turning over '000s a week doing it, it's best to let it go. Anyone making more than small gains from this is likely running a business anyway so it should come under their trading obligations and not the consumer.

[Taf]

Originally Posted by nffc

I am no fan of Temu or any kind of drop shipping outlets as the product is often poor quality.

As a family, we have only been let down by Temu on 2 occasions (out of dozens), and neither time was due to poor quality, but due to the wrong item being sent. An instant no-quibble refund for both, no return required.

I have often seen reports of Temu clothing not being the size advertised, but my wife and daughter have not seen any evidence of this in their many purchases.

A neighbour asked my to source spare parts for gardening tools. Amazon and Ebay prices were bad enough, but all the many Parts Supply" companies seemed like they were taking the pi55. The parts were here in a week from Temu, and the quality of each was perfect.

---------- Post added at 10:09 ---------- Previous post was at 10:05 ----------

Originally Posted by Inactive Digital

I'd rather buy from a high street outlet that employs people in this country than a tax-avoiding dropshipper overseas. One contributes to society, the other takes from it.

All Temu and AliExpress orders pay VAT to the UK coffers.

And how much is produced in the UK these days? I suspect that a very large proportion of items on sale in the UK were actually manufactured in China.

[Inactive Digital]

Originally Posted by Taf

As a family, we have only been let down by Temu on 2 occasions (out of dozens), and neither time was due to poor quality, but due to the wrong item being sent. An instant no-quibble refund for both, no return required.

I have often seen reports of Temu clothing not being the size advertised, but my wife and daughter have not seen any evidence of this in their many purchases.

A neighbour asked my to source spare parts for gardening tools. Amazon and Ebay prices were bad enough, but all the many Parts Supply" companies seemed like they were taking the pi55. The parts were here in a week from Temu, and the quality of each was perfect.

---------- Post added at 10:09 ---------- Previous post was at 10:05 ----------



All Temu and AliExpress orders pay VAT to the UK coffers.

And how much is produced in the UK these days? I suspect that a very large proportion of items on sale in the UK were actually manufactured in China.

VAT, perhaps (though there are claims that 'thousands' of sellers are evading paying that over to HMRC here), but what about other direct taxes such as corporation tax, business rates, employer's national insurance. Then there are indirect taxes from employing people, such as their income tax and employee national insurance. Those employees will spend some of their earnings in the local area, in other shops, restaurants etc, maintaining jobs for other people in their area and the wider country.

I understand that cost of living is still tough, and the prices charged by dropshippers are attractive. But I also fear that those who need to use these services the most (eg those who earn at, or close to, the minimum wage) include the like of retail workers whose very jobs are threatened by them.

You raise a very good point about the loss of manufacturing in the UK and the impact that has had. Job losses hit areas such as the midlands and north east, leading to falls in living standards and, no doubt, an increase in welfare payments by the government. I appreciate its not just dropshippers threatening our high streets - its the wider shift to online shopping. But, to offer the likes of Amazon a little bit of credit, at least they are creating jobs over here.

[Taf]

Part of my career was spent repairing electronics.

Spares used to go the usual route: producer - exporter - importer - distributor - wholesaler - vendor. Each step of the "Grocer Economy" added-on its own costs and profits.

Then the Procurement Department found that they could follow the model of many supermarkets: producer - vendor.

Spares then became so cheap that we could get 10 of the items for the usual cost of a single one.

Then they looked into repair costs, and instead of employing people to do the repairs, they slashed the technical staff levels to almost zero, and that also meant the levels of staff for administration and storage. They did that by sending the unserviceable items to the Philippines for repair where labour and parts costs were minimal.

This has been a similar story in many Services and Industries, with work exported overseas. Trump has started a campaign to get jobs back onto US soil, but the costs just get transferred to consumers. People seem to think that his Tariffs are a new thing, but they have always existed, and will probably always exist in the Capitalist World, especially since it became filled with multinationals.

The link Inactive Digital posted, highlights the simmering bad feelings towards companies like Temu, especially as there are those who get around the rules.

Hence my prediction that a tax of some sort, along with tightening of the rules, is on its way, and it'll be the customers who will suffer.

[Carth]

I guess I'm lucky (?) in the fact I can no longer buy things online.

Up until a couple of years ago I could, but now it all needs 'verification' for the sale to go through.

As I don't have (don't want) Online Banking, Phone Banking and all that super secure innovative crap, any verification codes sent to my PC or Phone obviously have no destination so never arrive (if they're even sent . . how do you send a text to a number you don't know? )

Quite happy not 'impulse' buying various things of dubious quality