Will Red be cheaper out of state?

I think playing a bit fast and loose with the rules might be a reasonable calculated risk for small items, but with a big capital expenditure like a camera it would be a bit foolish.

Also I'm assuming most people are buying them as part of a business venture, so will reclaim the VAT, and write down the purchase as a business expense. Doing that without proper paperwork which would stand up to a VAT/Tax audit would be getting into a very dodgy area.
 
I am contemplating going through the process to set up a sole trader account in UK. Like all things in life there are good and bad points. I have been told that i can register for VAT even though i will be below the threshold for declaring VAT. I will then have to charge VAT on anything i sell or supply.

Someone mentioned the advantage/risk of simply picking the camera up by flying to the states and going through customs thereby initially saving on the import duty and the VAT. For the hobbyist it might be worth the risk if you are that way inclined. For others in business i am not so sure?

Most busineses will be able to recover the VAT but will still have to pay any import duties imposed. So you are really talking about 4% - 8% of import duty roughly. It might be exempt but perhaps unlikely. However you THEN have to claim this new expensive purchase against your business and presumably claim your maximum of 50% in that first year of purchase and say 25% for the next couple of years. The tax people will demand a proper invoice stating where you bought the camera and how much you paid. If you stay legal the tax authorities will then demand that you pay the VAT and import duty as well as a possible fine. They may also decide to look into your business in view of your attempt to defraud them?

If you alter your invoice in any way and you get caught you could be in serious trouble.

I had initially estimated a rough price of £30,000 to get me a complete set up with red camera lenses matt boxes tripod,FF EVF red rails etc. Not counting computer and storage other than red drive. I sat up last night and with all the taxes added to lenses, sound mixers, wirless receivers, camera etc i was up to £40,000 easily. This is UK based i understand other countries are even more worse off. Not for once did i view the camera as a $17,500 piece of equipment. Most of us are fairly sensible guys but i must admit the total price of things is pretty depressing to say the least. The red one then for most europeans possibly is really $20,000 whichever way you look at it. The red lenses work out even more expensive with tax.

Well as someone said to me on this forum "If you want to play you have to pay" :huh: Michael
 
laboprod said:
...should be able to come along to the RED factory to take my camera, and then go back to Switzerland. The only way not to pay the tax is to not declare it at the customs.
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You could always take it out of its packaging, and buy a cheap Walmart camera bag for it. Then at the CH customs, just tell them it is your "little" holiday video camera you used while in the States. Of course, it'll only work if the customs agent isn't familiar with RED, and doesn't question it not really looking like a cheap cam. :)
 
I totally agree with not trying to escape the taxes if you're a company, since you get back the VAT.

But I believe some people like freelance DPs and others might be interested in getting the camera as part of their package, and they are not necessarly able to set up a company. For them the 20% taxes is something to take into account. I know a lot of people will advise them to start a company just for this purpose, but then they have to be careful with thinking that it does not cost much to do so.
In France we have policy that encourages people to start businesses with even just 1 euro capital. But it's a foolish policy cause the truth is that it will cost much more than this and to have a company running, even if you have almost no charges, office or employee, it will come to at least 5000e per year of cost just for administrative and fix charges.

That being said I do agree it's much safer to buy a Red One as a company for all the issues that might come up in the future as far as repairs, maintenance and so on. A clean business is a better business.

A.
 
kikourof said:
But I believe some people like freelance DPs and others might be interested in getting the camera as part of their package, and they are not necessarly able to set up a company.
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Don't know about the situation in France, but in the UK you can register for VAT as a Sole Trader (ie not a limited company) and that incurs no administrative or fixed charges. That's how my business works.

Since freelance DPs would be mostly working for production companies, who should themselves be VAT registered, they have nothing to lose, and a lot to gain. A VAT return is not a difficult thing to fill in yourself, so you don't need to pay an accountant, unless you're too busy working, in which case it shouldn't be a problem!

I would advise any UK business to voluntary register for VAT, unless they primarily offer services to the public, who of course can not reclaim VAT.

But that's just my opinion.

Nick
 
That's what I don't like about France, working like you guys do in UK, US and many other countries make so much sense!!
Why do they have to be such pain in t... in France when you just try to make the country and the economy move forward!!
Sorry, just getting it out...
 
kikourof said:
That's what I don't like about France, working like you guys do in UK, US and many other countries make so much sense!!
Why do they have to be such pain in t... in France when you just try to make the country and the economy move forward!!
Sorry, just getting it out...
Click to expand...

That's interesting, I'd assumed regulations were standardised across the EU (they try to homogenise everything else!) You could always set up with your registered office in the UK, then you can get our benefits :beer:
 
vidled said:
You could always take it out of its packaging, and buy a cheap Walmart camera bag for it. Then at the CH customs, just tell them it is your "little" holiday video camera you used while in the States.
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Of course you'll have to get past a US bag check with what looks like a piece of a bazooka or a smart bomb in your carry on... "No really, officer, it's a an amazing camera!" as they evacuate the terminal and the agent pees his pants.
 
I would expect most people to buy a camera at this price point to own a business (doesn't have to be anything fancy). Then you should be able to put this up as a business expense. In the case of Holland (where I'm frome) you write this up as an investment and you get your tax back.

I've never heard of customs seizing an item (that you are bringing into the country) as long as you pay the tax (plus a fine I think) when they do catch you. However, this is how I think it works in Holland. Other countries will no doubt be different.

Most of the people dislike taxes, but it is part of life. I suggest following the rules so you can enjoy the camera, have no problems bringing it with you across borders (bring a copy of the receipt / invoice!) etc.
 
robl said:
I've never heard of customs seizing an item (that you are bringing into the country) as long as you pay the tax (plus a fine I think) when they do catch you. However, this is how I think it works in Holland. Other countries will no doubt be different.
Click to expand...

In the UK if you walk through "nothing to declare" and they stop you and find something which you should have declared then it is very likely you would just be told off and hit for the duty. If however you present forged documents in an attempt to evade paying duty and they see through them they are going to come down very hard on you. Every case is going to be taken on it's own merit and they may decide to just issue a fine along with the requirement to pay the duty, but it is not unusual for goods to be seized. I suspect it depends on how calculated they think you were in your attempt to defraud. Items seized become property of the crown.

So if you see the Queen sporting a rather new fancy camcorder...

Martin
 
Well I asked some questions to some friends, and had some answears, but they are not really import/export expert...

1) if you go to the USA to buy the cam, you have to pay local VAT (if they have) and ask for special paper to be able to get it back, but only after you have declared and paid the VAT in your country (Switzerland for me), so any way you end up paying the VAT (assuming it does exist in the USA).

2) If you stay in your country, USA does not tax VAT on the camera (as VAT is only inside country), your country will, plus some customs taxes.

3) In Switzerland, either you are VAT registered or not, you cannot get back the VAT on that camera, as you are the last of the chain of the product. You are the user of the tool, so you pay the VAT. But you will charge the customer for what you paid for the gears, he is renting plus the hours of work (let say you are the DoP). Like a carpenter does not get back the VAT on hammers he buys, but do get it back on the wood, as he is selling it, he is not the last of the chain. But of course you can subtract all your business charges (up to a certain limit :-) when paying the annual state taxes.
 
I buy RED, pay VAT AA €uros.

I make a video, sell it and charge BB €uros VAT from the customer.

Each month I give the emporor all the VAT I have collected, minus VAT I have paid. In this case BB-AA.

As long as BB > AA I have not suffered anything from paying VAT on RED.

That's why it is called Value Added Tax. Each step pays for the value difference.

The full VAT amount is cumulated to the last payer. As long as the intermediates are making a profit they do not pay any VAT, just pass it thru.
 
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