Failure to collect VAT and Customs Duty that is due on cameras imported into the UK, through non-EU based websites, may drive up high street prices, warn UK photo industry chiefs.
The news came just days before a report was published by the BBC about loss in VAT revenue.
The Photo Marketing Association (PMA) and Photo Imaging Council (PIC) claim that the photographic products ‘tax scam’ results in up to 10m in lost government revenue each year.
And they have called on the HM Revenue & Customs (HMRC) and the Royal Mail to act.
‘Many internet companies based outside the EU advertise photographic goods without mention of tax,’ said PMA and PIC in a joint statement today.
‘Overseas internet companies want to attract buyers by advertising photographic goods without mention of tax. This can give them more than a 20% price advantage.
‘The cost of international shipping has dropped and it is relatively cheap to send goods over the Pacific Ocean,’ they claim.
PMA and PIC accuse HMRC of failing to ensure the collection of tax and duty, despite an arrangement with the Royal Mail.
‘The postman often finds it easier to deliver the package rather than try to collect duty,’ the organisations claim. ‘Some post offices are less efficient than others in performing the function, so many imported products slip through.’
PIC and PMA also suggest that some suppliers ”declare the gift of no commercial value”, for easy clearance?’
One Hong Kong-based website, for example, states ‘VAT free’.
‘When cheap imports – on which no tax has been paid – enter the country, there is serious damage to companies in the trade, which results in reduced services for the consumer.’
They warn that, starved of profits, it will be more costly for UK firms to ‘maintain their high street shops’.
‘Ultimately, the consumer suffers as the retailer may have to increase prices when the marketplace is reduced.’
At the time of writing, HMRC and Royal Mail had yet to respond to our requests for comment.