naruki Posted October 3, 2012 Share Posted October 3, 2012 (edited) So, I'm bidding on a bass on eBay US. The seller and I are trying to work something out, is it possible to insure a bass for a higher value than the declared value? Like if the bass is actually $1000, and we declare the bass to be worth $500 but insure it for $1000. Do customs slap VAT on the insured value or declared value? Edited October 3, 2012 by naruki Quote Link to comment Share on other sites More sharing options...
MrFingers Posted October 3, 2012 Share Posted October 3, 2012 (edited) Risky business. The declared value is the insured value if you go via insured shipping (you can insure your package via an external insurance, but that will cost a LOT). And customs aren't that retarded anymore than a couple of years ago. If they find a package with a very low value for what's inside of it, they will track down on "teh interwebz" what the content is actually worth, and will calculate customs and VAT on that value. Or they'll ask (ask as in: "if you don't give it to us, we will destroy your package") you to send them the original receipt/bill/... of your purchase, so they can charge the correct amount of VAT And you'll probably get a nice fine (here in Belgium the fine is 100% of the original value). Edited October 3, 2012 by MrFingers Quote Link to comment Share on other sites More sharing options...
fretmeister Posted October 3, 2012 Share Posted October 3, 2012 If you pay £500 for a bass and insure it for £1000 then you still only get to claim £500 back if it is destroyed / damaged - because that is what you lost. Insurance is not there to make a profit on, it is to put you back into the same financial position as you were before the item went missing / damaged etc. To claim more than your actual loss is called Insurance Fraud. Quote Link to comment Share on other sites More sharing options...
naruki Posted October 3, 2012 Author Share Posted October 3, 2012 (edited) Actually I just don't wanna pay full VAT for a used instrument. I actually did this before, when I bought a Music Man Bongo from the US but I don't know how the seller did it. Of course I'm not gonna declare it SUPER LOW. Maybe 70% of the original price not including the hsipping. Bad idea? Edited October 3, 2012 by naruki Quote Link to comment Share on other sites More sharing options...
brensabre79 Posted October 3, 2012 Share Posted October 3, 2012 Its a risky business. There are exceptions, but basically if you buy something from the US new or secondhand it doesn't matter, if it has not been bought in the UK then No VAT has ever been paid on it so even if its a 20 year old item, as far as Customs and Excise are concerned it is VATable. You could declare the value for less than you paid, you could even get the sender to say its a gift, but you'll still have to pay VAT and if anything happens in transit the declared value is all you'll get. Best case you'll pay less duty and get your bass in perfect condition. Worst case you'll be found guilty of tax avoidance and insurance fraud, the bass will be seized and you'll get a fine on top. Quote Link to comment Share on other sites More sharing options...
simwells Posted October 3, 2012 Share Posted October 3, 2012 You can't insure it for a different value than the declared one. All that previously probably happened was the seller sent it and declared a price and told you what the insurance offers up to not what they would have paid out if lost which is the declared. Quote Link to comment Share on other sites More sharing options...
BassPimp66 Posted October 3, 2012 Share Posted October 3, 2012 Looking at how crazy some of the gear depreciate in value, you may not be far off by declaring super low value. Quote Link to comment Share on other sites More sharing options...
muttley Posted October 3, 2012 Share Posted October 3, 2012 [quote name='MrFingers' timestamp='1349277043' post='1824160'] Risky business. [/quote] Possibly . [quote name='MrFingers' timestamp='1349277043' post='1824160'] The declared value is the insured value if you go via insured shipping (you can insure your package via an external insurance, but that will cost a LOT). [/quote] I'm not sure. Carriers such as FedEx insist on a commercial invoice to accompany the package. HMRC will use this invoice to calculate the duty and VAT payable. Insurance is a different matter. Intuitively, I can't see a problem insuring the package for more than the declared value. Insurance is to cover you for loss. Say you paid a tenner for a 1960s Fender - it's insurance value is not £10, but possibly much more (maybe as much as £15 - joke!). In other words, what fretmeister wrote above. I suggest asking the seller what carrier they are going to use, and giving the UK branch a call for advice. I expect this type of thing happens all the time, especially in the antiques trade. Quote Link to comment Share on other sites More sharing options...
EssentialTension Posted October 3, 2012 Share Posted October 3, 2012 [quote name='naruki' timestamp='1349277752' post='1824177'] Actually I just don't wanna pay full VAT for a used instrument... [/quote] Just pay the tax, it's the right thing to do. Quote Link to comment Share on other sites More sharing options...
bertbass Posted October 3, 2012 Share Posted October 3, 2012 Here, http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&propertyType=document&_pageLabel=pageTravel_ShowContent&id=HMCE_CL_000014 Then here, http://www.dutycalculator.com/help_center/do-i-have-to-pay-duty-and-vat-on-used-second-hand-or-refurbished-items/ Quote Link to comment Share on other sites More sharing options...
fretmeister Posted October 3, 2012 Share Posted October 3, 2012 [quote name='EssentialTension' timestamp='1349281576' post='1824269'] Just pay the tax, it's the right thing to do. [/quote] +1 There is a difference between avoidance and evasion. And the OP is attempting evasion. Quote Link to comment Share on other sites More sharing options...
mikeswals Posted October 3, 2012 Share Posted October 3, 2012 Being in the US and I have shipped many basses overseas....insurance limitations will depend on who the shipping comany is. 95% of the basses I sent have been through the Postal Service, it's the cheapest company, but they limit the insurance value to around $675 to $700 dollars (US) per box. So If I sold a valuable bass with a bolt on neck that needed absolute coverage, then I would split up the bass and ship in two boxes, insuring each for the maximum allowed value: ie, $675 each. But they make it impossible to collect on the value if it's more than that, and will only pay the insured. On UPS or Fed Ex, it's different. The declared value is the insured value. But both of these companies charge about double the shipping rate of the Postal Service, and most of the time the receiver gets charged a brokerage fee in addition to the Customs fee. But with that said, the main thing I've been running into now is Customs in most countries have been asking that an invoice to be put on the box. A couple of countries in Europe I did not include invoices for have had me fax/email invoices to them before they would release the bass to the receiver. So in other words, the invoice they're asking for better match the value being declared. As someone in another post mentioned; these Customs offices are not stupid, and getting smarter at it every year. Quote Link to comment Share on other sites More sharing options...
philw Posted October 4, 2012 Share Posted October 4, 2012 [quote name='naruki' timestamp='1349277752' post='1824177'] Actually I just don't wanna pay full VAT for a used instrument. I actually did this before, when I bought a Music Man Bongo from the US but I don't know how the seller did it. Of course I'm not gonna declare it SUPER LOW. Maybe 70% of the original price not including the hsipping. Bad idea? [/quote] Yes, bad idea. What you're proposing is tax evasion. It's the kind of thing we all get so riled about when big corporations or rich fat cats do it. Who's side are you on? P Quote Link to comment Share on other sites More sharing options...
fretmeister Posted October 4, 2012 Share Posted October 4, 2012 [quote name='philw' timestamp='1349377472' post='1825566'] Yes, bad idea. What you're proposing is tax evasion. It's the kind of thing we all get so riled about when big corporations or rich fat cats do it. Who's side are you on? P [/quote] Big Plus One. If the OP doesn't pay his taxes it puts all of our taxes up just a little bit. Quote Link to comment Share on other sites More sharing options...
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