Supplier wants to declare as lower value to save them money?

Discussion in 'Accounts & Finance' started by JPMiddleton, Oct 18, 2016.

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  1. JPMiddleton

    JPMiddleton UKBF Regular Free Member

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    This one has got me a little confused.

    So, long story short:

    We placed an order for around $1500 with a producer of small metal items. The producer and designer of which is based in Romania.

    Upon invoicing, the supplier wanted to charge the VAT but of course we provided our VAT number to zero rate it. He wasn't aware of this, I assume because he's a very small one-man band and is new to production of any kind.

    After placing the order, he then had the quantity we ordered produced just for us using our funds.

    Upon completion, we arranged for collection with our courier from the factory in China directly, and completed all required forms and as we always do - we declared the full value of the shipment.

    Now, the supplier is asking us to lower the declared value to $100 as he says that he will be liable to pay tax also? I'm quite confused by this, I have never encountered anyone who needed to pay tax on export - even if based in another country. I'm not prepared to do that, and he's now saying it cannot be sent without a declared value of $100.

    I cannot see another solution, and to be honest - will probably do a chargeback with AMEX to get our money back because he's not willing to refund.

    Any advice? Has anyone got any idea of what he may be referring to in terms of their tax?
     
    Posted: Oct 18, 2016 By: JPMiddleton Member since: Aug 18, 2011
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  2. deniser

    deniser UKBF Legend Free Member

    8,100 1,702
    I don't know the answer to your question but I am guessing it must be something to do with the goods leaving China because I have also had a Chinese supplier who refused to put anything other than a nominal amount for the value of the goods even though I told them we need to do everything properly in terms of documentation.

    In the old days, there were quotas for exports of some products (including in our sector for man made fibres) - wondering if it still has something to do with that?
     
    Posted: Oct 18, 2016 By: deniser Member since: Jun 3, 2008
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  3. JPMiddleton

    JPMiddleton UKBF Regular Free Member

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    Interesting, he hasn't mentioned that but perhaps it could be. Did you accept a lower value?
     
    Posted: Oct 18, 2016 By: JPMiddleton Member since: Aug 18, 2011
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  4. Newchodge

    Newchodge UKBF Big Shot Free Member

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    If you are prepared to be party to a fraud, that is up to you, but you don't sound as if you want to do it. So don't. You could also consider threatening a breach of contract action if they refuse supply at the agreed price, perhaps with a report to the relevant authorities?
     
    Posted: Oct 18, 2016 By: Newchodge Member since: Nov 8, 2012
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  5. JPMiddleton

    JPMiddleton UKBF Regular Free Member

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    Perhaps I wasn't clear. I will not entertain this and they have been told that at least 3 times now. I've had quite a few small parcels arrive with a lower declared valued through services like USPS/Parcelforce and UPS in the past but those were not our own accounts and I wasn't aware in advance.

    I have no interest in evading tax or commiting fraud. That is how I articulated to them also.

    Who would be the relevant authorities In your opinion? Thanks!
     
    Posted: Oct 18, 2016 By: JPMiddleton Member since: Aug 18, 2011
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  6. Newchodge

    Newchodge UKBF Big Shot Free Member

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    Probably HMRC, but I'm not an expert in this area.

    Good for you, incidentally, for sticking to your principles.
     
    Posted: Oct 18, 2016 By: Newchodge Member since: Nov 8, 2012
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  7. Newchodge

    Newchodge UKBF Big Shot Free Member

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    I've just re-read my post. What a shitty world we live in when someone acting properly and morally, as you are, appears to be so unusual that I am congratulating you.;
     
    Posted: Oct 18, 2016 By: Newchodge Member since: Nov 8, 2012
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  8. deniser

    deniser UKBF Legend Free Member

    8,100 1,702
    No. They agreed to put the correct value but they then sent the goods, we received them and then we saw on the paperwork that they still had only put $100 down for the value of the goods. I then even tried to ring customs to ask how to declare/correct it from this end but couldn't find anyone to speak to. So I gave up.

    I would also like to know why they do this.

    Maybe they have so many people asking them to mis-declare the value that is has become the norm?
     
    Posted: Oct 19, 2016 By: deniser Member since: Jun 3, 2008
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