We’ve continued to work hard behind the scenes to ascertain the duty rate on the iPad and we’re edging ever closer to a definitive (and hopefully favourable) outcome. In our previous post, we reported that there are potentially two tariff classifications in focus; the one we want is duty free; the one we don’t want attracts 3.7% duty.

Our ‘tech’ specialist contact at Customs has returned to work and following numerous telephone calls and email exchanges, it appears he may have come to the same conclusion as me regarding the correct tariff classification for the iPad – good man !

As things stand, we only have his ‘non legally binding’ verbal opinion and, since we pride ourselves on the accuracy of tax information we provide to our customers, that isn’t good enough for us here at Bundle Tech. Consequently, we’ve chosen to opt for the belt and braces approach – no one’s going to be caught with their ‘trousers down’ under our watch!

In circumstances where the classification of a product is contentious, or subjective, we take steps to ensure legal certainty and this can only be achieved by way of a written application to Customs for a tariff classification ruling; or to give it its’ official name, Binding Tariff Information (BTI). This document confirms the Customs tariff classification of a product and is legally binding across all 27 EU member states for a period of 6 years.

The application provides an opportunity to present an argument in favour of the classification we believe to be correct; clearly, we aim to secure the duty free classification if at all possible, and we believe we’ve put together a case that can achieve this.

Customs at Southend have confirmed receipt of our application and, from what we can gather, it could well be the first ruling application for the iPad to be lodged in the EU. It’s all exciting stuff and we’re now waiting with baited breath for the final (and official) outcome. While the Customs charter allows them up to 45 days to respond to the application, we would typically expect the ruling to be issued within 2 to 3 weeks.

So, regrettably we have to report a further delay before we can finally shout from the roof tops. However, we should certainly be ready for the US launch date, and it may well be worth the wait !

Hope to have news soon, watch this space.

Happy Bundling

Sean

It has amusingly been heralded by some commentators as the most eagerly awaited tablet since Moses disappeared up Mount Sinai. Following months of intense speculation, Apple’s Steve Jobs finally unveiled their latest creation, the iPad, at an event in San Francisco a fortnight ago, describing it as a ‘third category’ device somewhere between a smart phone and a laptop.

Boasting a 9.7” LED backlit IPS display and ‘remarkably precise’ multi touch screen, this new generation gizmo weighs just over half a kilo and is an incredible 1.25 cm’s thick – it has the appearance of an oversized iPhone, but it promises to be something of a revelation.

The Wi Fi version will be available for shipping in the U.S. late march, whilst the 3G model is expected to be released sometime in April. With prices ranging from US$ 499 for the WiFi model with 16Gb of flash memory to US$ 829 for 64Gb of storage and ability to connect via a 3G mobile signal on any network, they’re likely to sell like hot cakes.

It has been mooted that international price information won’t be available until either June or July, so, if like me, you want one as soon as they become available in the US, you’re going to want to know how much import tax you’ll have to pay, right ?

My aim this week was to nail down where the iPad is classified within the Customs tariff so I could reveal how much duty it would attract, and add it to our product categories section in readiness for the release date. Alas, no luck as yet, in fact it has proved to be a rather frustrating experience.

Unfortunately, the Customs Tariff was written back in the 1950’s, in the days when an inside toilet was considered the height of luxury, and little has been done to bring it into the 21st Century. If only it had been written by Nostradamus, I mused this week, he would have had the foresight to include products at the cutting edge of technology.

We have some great contacts within the Customs tariff classification section in Southend, but when technologically innovative items come onto the market, there’s always plenty of head scratching in that corner of Essex. All this has been compounded by the fact that their ‘tech’ specialist is currently on holiday, so there’ll be a short delay before we can announce the duty rate that will apply.

The one thing I can confirm at this stage is that UK import VAT will apply at 17.5%. In the meantime, after much deliberation, I’ve narrowed it down to two possible classifications for the iPad, and all hinges on whether the it can be considered ‘freely programmable’; if we can tick this box and convince the doting father at Customs, everyone’s a winner (except perhaps Her Majesty); classification will fall to the heading for laptop computers - duty free.

If all else fails, the worst case scenario is a duty rate of a mere 3.7% - hardly a show stopper for one of the most talked about devices on the net.

Watch this space, will get back to you with the final rate next week

Happy Bundling

The recent release of Google’s Nexus One phone has been met with mixed feelings amid reports of poor Customer service and bugs affecting certain functions; but, one thing is certain, it’s a nice piece of kit and there’s huge interest in the UK with people scrambling to be among the first to own the latest gizmo.

Whilst the Nexus One will eventually become available through Vodafone, the launch date has yet to be confirmed, so buyers are looking to the States where the phone is already available (and cheap) – but, the one question affecting that decision to purchase from abroad remains ‘What import taxes will I have to pay ?’. We’ve seen a range of rates put forward in various chat forums….so we’ve decided to put the record straight, here and now…. !

Currently, HM Revenue & Customs consider the ‘essential character’ of the Nexus One (and the iPhone for that matter) to be that of a mobile phone.

So what ? You ask. Well, it’s good news for you technology addicts….mobile phones are duty free on import into the EU ! (But please beware, you will still have to pay import VAT calculated on the sum of the price of the phone + shipping + insurance).

The ‘essential character’ really does work in your favour (sometimes); for example, stand alone Sat Nav’s attract duty at 3.7% and you’d have to pay a whacking 13.9% import duty on a DVD player, but you can ship a mobile complete with GPS application and video playback function and its’ still classified by Customs as a mobile phone – duty free – happy days !

So, what better reason to get on line and get to the front of the queue for that latest ‘must have’ smart phone.

Sean

DutyCalculator.com | Taking the guesswork out of import duty

CNET was unhappy with the vague information that Google provides when it comes to the import duty & VAT charges due when you import the new Google Nexus One. They prefer to consult the Duty Calculator instead, to get the accurate import duty & VAT charges.

Here is what CNET says: “Google includes a page on its Web site that offers to estimate your costs, but it’s pretty vague. We prefer Duty Calculator, which knows that customs doesn’t charge duty on mobile phones. You will have to pay VAT, though. There’s duty on the charger, but it’s so low that Her Majesty will waive the damage — no wonder we adore her. The total duty and VAT at the current HMRC official exchange rate is £63.40.”

Nice one, you can’t rely on Google for everything!

Happy bundling

Andre

Just so you are all aware, HMRC have announced the following changes to the de minimus levels for the collection of import duty into the UK from outside the EU as of 1st Jan 2010.

1. Duty of £ 9.00 or less will not be collected (amended from £8.00)

2. Goods of a value (excluding freight & Insurance) of £135.00 or less will be admitted duty free (amended from £120.00), but VAT remains payable.

Every little bit helps. Happy bundling

Andre