Seagate UK customer stung by VAT on replacement drive shipped via the Netherlands
- Reference: 1614338105
- News link: https://www.theregister.co.uk/2021/02/26/seagate_uk_customer_charged_vat/
- Source link:
Tom Parkinson, CEO at New State Entertainment, a group of labels specialising in dance and club music, said the business has four Synology NAS units that each house 10TB, 12TB, or 16TB drives.
[1]
"Occasionally bad blocks will rise on a particular drive and before failure it's advisable to swap out for a new HDD," he told The Register . "Having done this a few times over last three years since install and having five year return to base swap with Seagate – [it was] always super smooth."
Except when it wasn't: one drive went down at the end of January.
[2]
According to Parkinson, he bought the product via official channels and was asked by Seagate to use its portal to process the return. He packaged up the defective drive and sent it to the company on return merchandise authorisation. Seagate agreed the drive was indeed borked and organised for a new one to be sent out.
Synology to enforce use of validated disks in enterprise NAS boxes. And guess what? Only its own disks exceed 4TB [3]READ MORE
The process typically takes a week, based on his past experiences, and on 8 February the drive maker advised that a shiny replacement was en route to Britain from a warehouse in the Netherlands. "Then silence" for 10 days, he told us.
The UPS service tracking the package stated it had been "delayed due to a Brexit-related disruption" and the logistics firm was "adjusting delivery plans as quickly as possible". Parkinson later logged into the UPS system only to discover there was a charge of £45.12 including £33.62 in "government charges" and £11.50 "Brokerage charges" on the new drive.
This was 10 to 15 per cent of the original buy price, said Parkinson, who told us he had not been made aware of any changes. "Seagate support were very kind & sympathetic about how stupid it is to ask a yes/no question referendum about something so complex — but ultimately unhelpful…"
He said import duty was effectively paid twice on the drive and its replacement. And Seagate had "NOT" suggested any alternative workaround to the situation.
Britain formally left the EU at the close of 2020 and so customs duty will be charged on goods worth more than £135 that are imported.
In a statement sent to The Register , a spokeswoman at Seagate said: "As we all know, Brexit brought some new terms to how businesses operate in the UK, consequently there are some changes for the UK customers, too.
"With the UK leaving, a border came between the EU and the UK and as a result VAT is charged when products are crossing that border. We had this information communicated and sent out to all customers saying that the customer is responsible for paying taxes and duties to and from Seagate. This is not something new but with the UK leaving the EU, it is new to customers in the UK, indeed."
The returns policy is [4]here .
The spokeswoman added: "It's important to mention though that there are no import duties applicable for hard drives. What is charged is import VAT. In addition, while it is correct that the customer is responsible despite the warranty, the customer will be entitled for a VAT relief. If they declare the replacement as outward processing relief at export. If the customer fails to do so, then yes, it is up to the customer to pay for the VAT, and this is a Brexit consequence: VAT is charged when products are crossing the border."
We have left the last word to Parkinson.
"We are a small, small player with only 64 drives in our 'SMB' Synology set up – what are bigger companies and UK data centres with 100s & 1000s [of] drives gonna do? Buy stocks upfront and ignore warranties? So much red tape and wasted time."
That was always the fear of Brexit: a wave of bureaucracy. Still, the blue passports are being dispatched.
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Are you paying import duty or facing other consequences of Brexit? Send us an email [6]here . ®
Get our [7]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/storage&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YDkpLRhlb0wZQ0MEWz@f6QAAAMM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/storage&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YDkpLRhlb0wZQ0MEWz@f6QAAAMM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[3] https://www.theregister.com/2021/02/02/synology_enterprise_nas_drives/
[4] https://www.seagate.com/gb/en/support/warranty-and-replacements/return-policy/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/storage&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YDkpLRhlb0wZQ0MEWz@f6QAAAMM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] mailto:pkunert@theregister.com?subject=Brexit%issues
[7] https://whitepapers.theregister.com/
Re: Should not have Netherlands VAT ...
have been removed when the drive was exported from the EU ?
It probably was, and Seagate kept it, but then did nothing to ensure that the recipient was reimbursed or that they prepaid the UK VAT. This is Seagate's fault, they should have prepaid the UK VAT before shipment, since this was a warranty replacement. Instead they just shipped it under pre-Brexit rules and dumped the problem on the customer.
He should have refused the parcel.
Re: Should not have Netherlands VAT ...
Seagate have a plant at Springtown in Northern Ireland. While this is outside the EU, there are import restrictions between Northern Ireland and the rest of the UK (and none between Northern Ireland and the EU). A colleague of mine from County Down was surprised to discover that he had to fill out a customs declaration to ship a birthday present back home a few weeks ago. The existence of this internal customs border within the UK is probably most safely described as "controversial". I don't know if the drive at the centre of the article was made at Springtown though.
Seagate may also have manufacturing sites in the EU - the only ones I know of are in the USA. According to Wikipedia, Seagate's legal (i.e. "official") headquarters are in Dublin, though.
Re: Should not have Netherlands VAT ...
"The existence of this internal customs border within the UK is probably most safely described as "controversial". "
That's putting it mildly. Basically, we have been told that we have to have an internal border or the IRA will start killing people again. It's wrapped up in various euphemisms but that is what is at the core of it.
We had a golden opportunity to solve this once and for all when the EU suggested closing the border; then it would have been their problem how to police it and them carrying the responsibility for it happening, and the people of NI could have had a good laugh at watching them try. Instead we have a country divided in two with the ridiculous situation of having to "import" goods from one British county to another.
The Irish bleat on about not "going back" to a hard border, but there never was a hard border as dozens of murders knew perfectly well when they skipped over it knowing after carrying out their acts safe in the knowledge that no one in Ireland would lift a finger to hunt them down even if they had just massacred 29 shoppers in Omagh.
But as soon as there's the chance of losing money, the Irish are all about the importance of upholding the laws about border crossings.
Bastards. Utter utter terrorist-supporting hypocritical bastards.
Re: Should not have Netherlands VAT ...
So really it's the DUPs fault. If their side had planted more bombs then Dublin would be more scared of an Irish Monarchist Army than London is of a Republican one and a border in the Irish sea would be impossible
Re: Should not have Netherlands VAT ...
"Basically, we have been told that we have to have an internal border or the IRA will start killing people again."
That's not true.
The conundrum was that in order to have divergence of import-export regulations from the EU, the UK needed to put down a border somewhere. The British representatives in the negotiations proposed to not put a border until the divergence would actually start (May's backstop) and the EU was fine with it, but your House rejected it. Then Boris offered to put the border in the Irish Sea, and managed to con the DUP in NI with a promise that he wouldn't actually enforce this border - and they bought it hook, line and sinker.
That neither party proposed to put the border across Ireland was not just because of the risk of reigniting the Troubles (they still might reignite soon anyway, if the DUP can have its way...), but because that would deprive the Irish citizens of NI of their rights to do business and trade freely with Ireland (and the EU). And that would be a violation of the GFA, of which both the EU and the USA are guarantors. The status quo of NI people being able to both, Schrödinger-style, be British and do business with GB while also being Irish and doing business unfettered with Ireland, was forcibly broken by Brexit. One half had to give way to the other, it happened to be the British side that gave way so NI remained in the EU in all but name.
Re: Should not have Netherlands VAT ...
I think you've missed a *lot* of the NI side of the conversation. As soon as the idea of having the border at - gasp! - the border was raised, the Irish started ranting about how this would threaten the "peace process". In other words, the IRA would start killing people (the other lot weren't going to kick up a fuss about the border being enforced were they?) and that was the end of it.
The timing of the border placement was only important insofar as the Irish position was "never is good for us, is it good for you? No? Oh, well, that's sad." And we now know that if May's proposal had been adopted the EU would have simply used it to strangle any divergence no matter how small, keeping the UK in the EU in almost every important way. It was an unworkable idea which set a trap for the whole country. The UK team took far too long to realise that the negotiations were with what amounted to a hostile power.
As to the GFA, its role in this has been greatly exaggerated. It basically has nothing to do with anything. There's no "rights to do business and trade freely with Ireland" and still less for the rest of the EU.
The UK government gave way due to the moral blackmail of being portrayed as the people who brought back the troubles if they didn't give the IRA what they wanted - a wedge between NI and the rest of the country, which is what they have achieved. No one in the mainstream UK parties is willing to "threaten the peace process", which is why the EU's move over the vaccines should have been taken as a golden opportunity to let them have as much rope as they needed.
Re: Should not have Netherlands VAT ...
Lets play spot the angry Unionist
Re: Should not have Netherlands VAT ...
On the contrary I think I have been paying a lot more attention to this issue than I needed to, out of sheer fascination for the area and its history.
For instance I find it interesting how you completely obviate the importance and scope of the joint-rule arrangements that came from the GFA. Schooling, policing, energy, water, health, migration controls, agricultural policy alignment and coordination, etc. As the direct successor to Sunningdale, the treaty introduced a great deal of such joint, cross-border, power-sharing and mutual legal entanglement institutions, governance bodies, arbitration processes and mechanisms. So I am not buying your "it had nothing to do with anything" claim in the least. And maybe I should have evoked that level of complexity right away instead, fine.
There simply was no way to unwrap all of these complex, wide-ranging arrangements, and carve a border harder than anything that had existed there before, without voiding the treaty of basically 100% of its substance (and causing major constitutional headaches in both countries). That is why the Irish side of negotiations so firmly pressed the issue. And, Irish interests being European interests, and the EU being one of the signed guarantor of that treaty in the first place, obviously there was no going back on it.
So stop making this all about the IRA, that is ridiculous, and probably unhealthy too. Brexit was threatening many aspects of current NI-RoI governance if it was allowed to erect a border across Ireland, the peace process was secondary to it (and ideally should not even have come to the fore).
"The UK team took far too long to realise that the negotiations were with what amounted to a hostile power."
I think you are projecting here.
"No one in the mainstream UK parties is willing to "threaten the peace process", which is why the EU's move over the vaccines should have been taken as a golden opportunity to let them have as much rope as they needed."
That is delusional. Someone unfamiliar with the NI protocol forgot to recontextualise the exemption for NI in the draft document, Ireland pointed out the mistake and got it corrected. At no point was the UK in any position to "give the EU rope".
Re: Should not have Netherlands VAT ...
"While this is outside the EU"
NI has effectively remained a part of the EU in all but name.
Re: I believe that Seagate disks are made outside of the EU
in which case, import tax should be added too! ;) I dread to think what to expect if I ever wanted to "iimport" my bicycle, my tent and other outdoor gear, plus my inflatable kayak with my dirty underwear, etc, all stored at relatives' place in one of those EU countries behind the brexit curtain....
Re: I believe that Seagate disks are made outside of the EU
I'm now pondering the merits of using an inflatable kayak as the preferred storage receptacle for dirty underwear, and I must say. I can't fault it.
Re: I believe that Seagate disks are made outside of the EU
In all seriousness, you may find that you have to pay to import your bicycle and outdoor gear. My company regularly sent service personnel from the UK to (other) EU countries before lockdown, and they would often travel with a suitcase of personal tools. Current company policy is not to do this; our EU service team will ship standard toolboxes to customer sites (when travel is re-authorised).
Holidaymakers might get caught out too, if they have a roofrack full of bicycles for example.
Re: I believe that Seagate disks are made outside of the EU
" they would often travel with a suitcase of personal tools. Current company policy is not to do this; our EU service team will ship standard toolboxes to customer sites"
Good idea. Temporary export of tools (and cameras and musical instruments and sound equipment which my contacts deal with) can be done under a carnet to avoid some import/export hassle, but replaces it by carnet hassle and costs.
https://www.londonchamber.co.uk/export-documents/ata-carnet/
Most recent governments claim to be committed to the "creative industries" but this makes it more difficult for British musicians, photographers, etc. to work across the Channel. And that's even apart from work visas (different for every country, decided at the national, not EU level).
"Holidaymakers might get caught out too, if they have a roofrack full of bicycles for example."
I don't think that's likely to be a problem, but if you've got a particularly new and shiny, expensive bike on that roofrack then it would be a v good idea to carry the receipt from the UK shop where you bought it with you, so you can prove you didn't buy it whilst on hols.
Re: I believe that Seagate disks are made outside of the EU
AC>>> (when travel is re-authorised).
And when you've got the requisite work permits/visas for your UK service personnel ?
Re: Should not have Netherlands VAT ...
It was a replacement drive, so no VAT in the Netherlands, but the UK Customs sees the value of the drive on the documentation and automatically slaps on VAT.
That said, as a company, they should be able to reclaim the VAT, as Seagate said. It is a pain, but that is how it goes.
Also, what do datacentres and other bigger customers do? They usually have a bunch of drives on hand as spares - if I had an array of more than a dozen drives and mission critical, I'd always have a couple of spares in my stores, just in case - either as hot spares or cold spares in stores.
When a drive fails, the hot spare is brought online, the dud removed and a drive from stores put in its place. The dud is then sent back for warranty replacement and the replacement goes into stores.
Or I'd have 4 hour or 24 hour (depending on the criticality of the data) service contract, which would deliver the replacement in a timely manner.
With "only" 64 drives, I'd be damned sure to have a support contract or spare drives to hand.
Re: Should not have Netherlands VAT ...
Even if you had spare drives in store, you'd still need to get the warranty replacement. Otherwise you'll eventually use up all your spares.
Re: Should not have Netherlands VAT ...
Part of his complaint was how long it took to get the replacement. Having spares eases that problem. You use a spare and the replacement, when it eventually arrives goes in the spares bin.
Re: Should not have Netherlands VAT ...
From having participated in negotiations for bigger storage arrays, I know that some businesses agree with the manufacturer that they will have a small stock of warranty spares on site. I have also seen agreements where the manufacturer agree to keep a small stock locally, say within 20 miles. That way the spares can cover multiple businesses in the same geographical area.
Re: Should not have Netherlands VAT ...
As an RMA drive, surely no VAT is due, because it's a replacement, not a new purchase?
Re: Should not have Netherlands VAT ...
No it's a sale but Seagate eat the price.
> What is charged is import VAT. In addition, while it is correct that the customer is responsible despite the warranty, the customer will be entitled for a VAT relief.
Only if the customer is a business registered for VAT.
Which rules out quite a number of business, as well as consumers. So, we all get to pay for our "free" replacements.
Brexit really was a fucking idiotic idea, only made worse because it was implemented with absolutely 0 understanding of the impacts.
The worst of it is that, if it's under warranty, there shouldn't be a charge on the drive.
So if the price of the drive is zero, how is the VAT on zero £33.62?
Importing things here into Portugal, they ask to see the invoice and then work out the VAT on what you've actually paid, not the nominal value of the item. Just strikes me that those in charge didn't really think this one through.
Price vs Value
Because of dishonst customs declarations, most countries customs have a right, by local law, to decide the value of a shipment.
"But it's secondhand baby clothes and a present."
"They look new. We'll catalogue them, decide the value and charge appropriately."
I remember equipment "passports", the Carnot, or otherwise you paid duty on your gear crossing the frontier, going and returning.
Companies need to document the part LEAVING and then there is no VAT or duty on it returning, perhaps repaired or "refurbished".
Claiming back VAT can be an option too. It's nothing to do with the EU or Seagate, but UK Customs rules for foreign countries. Previously applied to USA, Thailand, China etc.
Re: Importing things here into Portugal
Not the experience I've had. Once I bought second-hand audio cables form the US (from a proper shop, providing a receipt) and Customs wanted me to pay more for VAT and import duties than the cable cost me. They told me the receipt was fake and that the 'correct' price was the one on the maker's website. Talking to others, I was told it's a scam they pull so merchandise is abandoned and auctioned, where people in the know, basically their buddies, buy the best lots for a bargain.
They're still not going to get the brokerage charges back. There'll likely be a VAT element to that but nothing more.
I wonder whether and how Tom voted. And all the other small business owners who are finding out the hard way about freeing the UK from EU red tape.
Yep, either way there's a direct cost.
Plus, of course, even if you can claim VAT relief, you're still not recouping it all in practice, as you've got to pay someone to sit and deal with more complex accounts paperwork than they had to pre-Brexit.
It's one of those things that wasn't explained/deliberately fudged over. The world is tied up with red tape. Always (since trading began) has been, probably always will be. The EU effectively removed a few layers of tape in exchange for a smaller number of other, mostly less cumbersome ones - such as standardisation.
They're still not going to get the brokerage charges back. There'll likely be a VAT element to that but nothing more.
I don't get 'brokerage charges', especially from shippers like DHL, FedEx or even the Royal Mail. But then I remember shipping stuff pre-EU. Like bimbling off to a UK post office, getting a package weighed, filling out a little form declaring what was in it, which was then stuck on the parcel along with a wodge of stamps to cover charges.
And I remember receiving packages, sometimes with additional charges to pay, if the shipper had got the paperwork wrong. But it was one of those things that went with international shipping. Buy X, get quoted to ship to or from me, let the shipping company deal with that stuff. After all, that's what they do, ship things around the world and hope the package and paperwork arrives in the right place.
So I'm puzzled why there's now a 'brokerage charge' applied for shippers like DHL etc to just do their job. Pre-EU, maybe that was just rolled into their shipping cost, and post-EU, it's seen as a nice per-package 'tax' they can apply to inflate their profits, and bears no relationship to their cost.
I'm kinda curious if DHL & others apply this charge to ship from the EU to other non-EU countries, of which there are many.
The charges are related to pushing your purchases through their bonded warehouses and clearing customs. It's a bit of a scam in the modern era, but it has always been the case since I can remember. And it never stopped for non-EU shipments.
That was a huge difference, when I moved to Germany. Every business has to be VAT registered and it also made for complications with UK businesses that weren't VAT registered.
If you buy something, you need a VAT invoice. If the supplier isn't VAT registered and doesn't have a VAT registration number, the accountants and tax accountants kick up a stink, because it causes problems with the Finanzamt (Inland Revenue). I've seen deliveries sent back to the UK for refunds purely due to the UK supplier being unable to quote a VAT registration number.
Sometimes the company has taken the hit and the extra scrutiny, because the product was hard to come by locally. But, generally, the accountants want an easy life, so will get you to send it back, if they can't get a VAT invoice.
That is why we are very careful with suppliers, no no-name Chinese imports and, generally no UK imports without a VAT number, and that was before Brexit.
But, but
Look at all this lovely sovereignty we've got!
Re: But, but
Can we have a Nelson Muntz icon?
Re: But, but
Apparently the British fish are much happier now
Re: But, but
Ah, a Jacob Rees-Mogg quote. The Brexit cheerleader who moved his own business to Dublin. Also a man, who despite being middle aged, still has a nanny (who famously accompanied him on his first election campaign). Presumably she still has to wipe the useless c*nt's arse.
Re: But, but
@Janne Smith
"Ah, a Jacob Rees-Mogg quote. The Brexit cheerleader who moved his own business to Dublin"
I keep hearing this but did he? From what I understand he had to move the base of a fund into the EU as per the EU protectionist rules. Not the business itself.
Re: British fish are much happier now
Because now they run the Tory party
Re: Apparently the British fish are much happier now
They certainly are considering no-one is trying to catch them anymore.
#BrexitBenefits
Re: But, but
Of course we have sovereignty. It wasn't the EU that charged the import VAT, it was the UK.
Re: But, but
And the extra £350 Million a week going to the NHS is absolutely amazing.
Re: But, but
Since 1973 the UK contributed a total of £215 billion to the EU.
So far in one year the cost of Brexit to the UK is over £200 billion.
After 5 years I'm still waiting for anybody to tell me what the advantages of Brexit are, I mean just one advantage, please....
Re: But, but
I see you have a downvote for your comment.
There are no advantages to Brexit. Any advantage stated, is easily proven wrong or false. The Brexiteers have to lie, but i don't think they know they are lying, in that, they are too stupid to work it out. Not trying to be nasty here.
Have a look at the Daily Express forum comments. You will then see the level of the IQ involved, where those people are easily manipulated, and the comments can be utterly disgusting.
I know the EU is far from perfect, and have done some really stupid things, but we do seem to be out performing them when it comes to stupid.
Re: But, but
Nailed it in one !
They can do stupid things and *not* be accountable - ever !
Re: But, but
Take Back Control !
Re: But, but
Off the top of my head, one benefit is that the UK is now free to join the Trans-Pacific Partnership. Trade with Peru would become much easier.
Of course, one drawback, for example, is that trade with the Netherlands is harder. Do the benefits outweigh the drawbacks? Some people would say yes, others no.
Re: But, but
Trans- Pacific Partnership
Huh?
Isn't the UK in the Atlantic ?
Re: But, but
If it had remained as a free trading zone then we would still be in and everyone would be happy.
But they had mission creep (planned all along ?).
Having unelected and unaccountable bloated oversight is a good reason to leave.
Re: But, but
Well one advantage is the vaccine rollout. The EU really made Brexit look attractive with their total botched handling of this topic and their bullying of member states who wanted to act more responsibly and order directly.
In hindsight
In hindsight, the referendum question should have been a 500+ page document like the UK & EU each put together on the consequences of Brexit. If after reading through that (and signing each page, by hand) one still felt that Brexit was a terrific idea, one could then check the 'yes, I love more borders, red tape and expenses' box.
As things stand, it seems that precious few who ticked that box really had the foggiest of what it would result in, except for what their local flavour of propaganda rag told them it would do. Yet as Wikipedia summarises it: "There is overwhelming or near-unanimous agreement among economists that leaving the European Union will adversely affect the British economy in the medium- and long-term."
Or in summary: paying additional import charges is the least of the UK's worries.
We live in a time when virtually every country in the world is in some kind of trading bloc: https://en.wikipedia.org/wiki/Trade_bloc and yet the UK is now the odd one out when it comes to free trade areas: https://en.wikipedia.org/wiki/File:Free_Trade_Areas.PNG
If adding more borders was such a bloody good idea, everybody would be doing it.
Re: In hindsight
Quote
"If adding more borders was such a bloody good idea, everybody would be doing it."
Best hope you stuff does'nt come from scotland then....
Should not have Netherlands VAT ...
have been removed when the drive was exported from the EU ? Or did they pay VAT twice ?
I believe that Seagate disks are made outside of the EU.