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Paying the correct amount of Duty/VAT when importing parts from the USA

Carrying on from another thread;

From time to time I source parts from the USA and there can be a variety of reasons for this. Better choice, better service, better quality, better price or the simple fact that its not available within the UK.

However I virtually always get hit with import duties. Now I point out that aircraft parts are not liable for import duty but I always get told that its too late now as its been calculated so it has to be paid.

On top of that I get hit with VAT which I suppose I don’t object to.

I also get hit with some handling charge which can vary with the Royal Mail starting at 8 quid but Fed Ex can be a lot higher.

Finally the price that I have to pay is escalated significantly as the charges are not calculated on the price that I paid for the part but the price I paid plus postage (and maybe VAT as well – I can’t remember)

Does anyone have any tips on how to avoid these inappropriate charges?

Don’t know about UK, but the package should be labelled “aircraft parts”. The big resellers do this, but the smaller ones don’t always remember/know.

Also, there exists special import/export companies. The way it works is the US reseller sends it to a private address in the US, then the other company handles it from there. They know everything about the quirks about this stuff, and are also able sometimes to get better shipping costs. I wasn’t aware of this until recently, so I haven’t tried. According to others it works just fine.

ENVA ENOP ENMO, Norway

It sounds like the supplier isn’t doing the the customs declaration properly. I would ask them to put “aircraft parts zero duty” or similar on the commercial invoice. Spending time on the HMRC website and finding the correct HS tariff code at 0% and asking for this to be added would be best.

Larger orders (value or size) might benefit from using your own freight forwarder as you have more control over the import process. For smaller stuff I’ve used transglobalexpress.co.uk who are an international parcel broker using DHL, UPS, Fedex etc. This assums the supplier allows you to collect.

I don’t think there’s any way around the handling charge if you’re paying VAT and/or duty. At work I find it’s usually cheaper to buy low quantities of parts in-country and pay local sales tax than to import the items officially.

Small low value items would be easier declared as personal possessions to avoid VAT, duty and handling fee, but obviously not in branded packaging.

EGHP-LFQF-KCLW, United Kingdom

Propellers and rotors and parts thereof; For use in civil aircraft: 8803 10 00 10
Propellers and rotors and parts thereof; Intended to be fitted in aircraft imported duty free or built within the Community: 8803 10 00 20

Undercarriages and parts thereof; For use in civil aircraft: 8803 20 00 10
Undercarriages and parts thereof; Intended to be fitted in aircraft imported duty free or built within the Community: 8803 20 00 20

Other parts of aeroplanes or helicopters; For use in civil aircraft: 8803 30 00 10
Other parts of aeroplanes or helicopters; Intended to be fitted in aircraft imported duty free or built within the Community: 8803 30 00 20

ELLX

Capitaine wrote:

It sounds like the supplier isn’t doing the the customs declaration properly.

Or the shipping company, because they don’t care, because you pay and not them.

ELLX

This is a constant problem with aviation parts imports.

Aviation parts don’t attract import duty into the EU. They will also prob99 won’t attract it post-brexit.

The difficulty is that it is hard to get the supplier to do the correct declarations. It is not enough to mark the packages as AIRCRAFT PARTS – because in modern times Customs clearance is done on the basis of declarations, not by physical examination of the goods (well, unless the xray shows the shipment to be a load of AK47s ).

I tend to not tear my hair out because this happens so often. But with something expensive I make the extra effort to spell it out to them, that the documents (the invoices, etc) needs to say AIRCRAFT PARTS in big letters.

As Lionel suggests, the supplier has little incentive to do it right because they already have your money in the bank

Adult illiteracy is a big component in this… the UK doesn’t have a monopoly on that, sadly.

VAT you can reclaim only if you are VAT registered.

Administrator
Shoreham EGKA, United Kingdom

For 0% duty on aircraft parts, just make sure the supplier’s commercial invoice quotes the correct Combined Nomenclature number and airworthiness tariff suspension declaration, and is accompanied by a copy of the airworthiness certificate.

For the clearance fee, someone has to do the work and it’s not unreasonable for them to expect payment.

VAT has to be paid, no matter where you buy the goods, kind of like night following day.

However, there is one variety of VAT fraud which we should watch out for as aircraft owners. When parts are exported (i.e. sent outside the customs union) for repair, the exporter can make an Outward Processing Relief (OPR) declaration so that when the repaired or re-worked parts come back, VAT is payable only on the cost of the repair, not on the total value of the repaired goods. All in accordance with Article 88 of the VAT Directive.

How the fraud work is this: a CAA licensed engineer takes a set of time-expired (knackered) rotor spindles off your Enstrom helicopter and sends them to Airwolf Aerospace LLC to be modified and included in their TT-strap STC kit. The engineer knows that Airwolf’s invoice will be, say, US$ 15,000 per kit, so he makes a fraudulent OPR declaration for that amount. Nobody checks these declarations, it’s all on trust. When the TT-strap STC kit comes in, the declared OPR amount is deducted from the amount on Airwolf’s invoice and, hallelujah, there’s no VAT to be paid.

Nobody seems to care. The CAA know about it, but it’s not their job and they haven’t the resources to check whether an engineer who makes false tax declarations is also falsifying Part M records. HM Revenue & Customs are just too busy – until the day when they decide to impound your helicopter.

Last Edited by Jacko at 22 Mar 21:57
Glenswinton, SW Scotland, United Kingdom

The engineer knows that Airwolf’s invoice will be, say, US$ 15,000 per kit, so he makes a fraudulent OPR declaration for that amount

Presumably he will generate an export invoice showing the $15k value, also. Isn’t that risking that the company in the US gets hit with a big chunk of import duty?

Are aircraft parts duty free in all trade around the world?

Administrator
Shoreham EGKA, United Kingdom

Peter wrote:

Presumably he will generate an export invoice showing the $15k value, also. Isn’t that risking that the company in the US gets hit with a big chunk of import duty? Are aircraft parts duty free in all trade around the world?

They are for entry into the US from Europe, per treaty. I have never paid any kind of tax or duty for importing aircraft parts into the US.

Last Edited by Silvaire at 22 Mar 22:18

Jacko wrote:

airworthiness tariff suspension declaration,

What does this phrase represent? a code number, a competed Customs Form, a collection of words one adds to the bottom of a commercial invoice?
I would appreciate a pointer as I am in the process of importing some items from the USA. I am aware of the requirement for a CN number and 8130.

United Kingdom
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