The Eastman Leather Clothing VAT ****.

[Siggi]

Hiya guys, long time no see. Happy new year to ya'll.

So, I guess this is mostly for my American cousins. I know you guys rate Eastman highly in the WW2 repro genre and yes, they're good. But, long story short, they ain't deducting the UK VAT tax when you buy from them in the USA. Video here:

I was going to buy the .50 cal B3 until I was finally able, via email, to pin them down and have them confirm that yes, they are making an extra 20% on international orders (I'm a Brit, living in Japan). Needless to say, they ain't getting my money now. That kind of greed, arrogance and duplicity is totally unacceptable.

Hope this helps somebody.

 

[ABCD]

My theory is that they do not want to undercut their Asian business, where their jackets are sold at a hefty premium.

So, I guess this is mostly for my American cousins

Same holds for Europeans. Eastman's prices did not change when the UK left the EU.

 

[Siggi]

I wasn't aware they had a separate gig in Asia.

 

[ABCD]

I wasn't aware they had a separate gig in Asia.

Stockists - Eastman Leather Clothing

www.eastmanleather.com

 

[Harris HTM]

Eastman's prices did not change when the UK left the EU.

Well, since 2016 eastman prices changed almost yearly! Big rises way above bove the inflation and most of the othet makers that I know.

 

[Tom71]

Strong language again on a pretty simple subject. If you don’t like the price for an item, don’t buy it.

Here‘s what Eastman (or Schott, or LostWorlds, or The Shop, etc.) are doing in terms of VAT:

Nothing.

All those companies fix a price they deem appropriate. They pocket this money as revenue in their annual returns. This is then taxed. For a national sale, VAT gets deducted (but is usually pre-setoff against VAT the seller has to pay for their own supplies).

Yes, VAT is not applicable to international sales, however the process of deducting it (on their webpages, in their internal accounting, in their tax returns) takes time, effort and know-how.

Yes, Aero, IronHeart Uk an others do deduct VAT from overseas orders, but many others don’t. I don’t know of a single American maker who does.
For the UK, the situation became critical when upon Brexit, VAT suddenly became applicable for European buyers, increasing prices by some 20% from one day to the next (VAT plus customs plus handling). Many customers didn’t follow that, so some players set up new systems for UK on the one hand and overseas’ sales on the other hand.

For American-sales no one ever cared. I haven’t read a complaint about Schott jackets just being 20% more expensive for Europeans.

It certainly is no ****. Eastman charges exactly the price advertised. It’s your local tax-authority who pockets the VAT, not Eastman. They do have a higher margin on international sales. That’s all, and that’s hardly exclusive to them or to cross-border businesses in general.

 

[Monitor]

@Tom71, Signed and seconded.

OP, we are talking about a £1,649.99 leather jacket here so if a 20% makes such a tremendous difference to you that you have to make 13 minute Youtube video about it, perhaps this isn't something you should be in the market for.

 

[Siggi]

Not meaning to be rude but that's a whole lot of words to express something so nonsensical.

A UK resident buys a .50 cal B3, pays £1649.
Eastman pockets £1319, the UK govt gets £330 in tax.

An American (or whatever) buys the same jacket, pays £1649.
Eastman pockets £1649, the UK govt gets nothing.

It's not rocket science and neither is it difficult to discover Eastman are doing it deliberately AND doing their level best to hide it.
Nor is it expensive or difficult to install software that removes VAT for international customers. Good grief, quite the opposite and I'm not aware of a SINGLE UK seller that doesn't have that function built into their checkout OR visibly says to contact them for a non-VAT price.

Eastman are snide spivs, deliberately choosing to profiteer from the ignorance and trust of non-UK buyers. It's not only financially despicable, it's an expression of contempt and disrespect too. International customers are being taken for mugs.

 

[tweedydon]

Not meaning to be rude but that's a whole lot of words to express something so nonsensical.

A UK resident buys a .50 cal B3, pays £1649.
Eastman pockets £1319, the UK govt gets £330 in tax.

An American (or whatever) buys the same jacket, pays £1649.
Eastman pockets £1649, the UK govt gets nothing.

It's not rocket science and neither is it difficult to discover Eastman are doing it deliberately AND doing their level best to hide it.
Nor is it expensive or difficult to install software that removes VAT for international customers. Good grief, quite the opposite and I'm not aware of a SINGLE UK seller that doesn't have that function built into their checkout OR visibly says to contact them for a non-VAT price.

Eastman are snide spivs, deliberately choosing to profiteer from the ignorance and trust of non-UK buyers. It's not only financially despicable, it's an expression of contempt and disrespect too.

As I understand VAT this is simply not true. The reclamation of VAT can only be done by the consumer; the retailer pays any taxes collected unless the consumer reclaims.

 

[Trouser Bark]

Multiple aspects at work here.

On a $2k USD jacket at 40% margin bagging an extra 20% increases the company’s gross profit by 50%. Good work if you can get it.

The second aspect is that for several years almost all manufacturers have had a significant backlog stretching their production queue out to crazy lead times of a year or more, sometimes two. When that’s the case the mfg only has one tool to correct and that’s to raise prices until demand slows enough that their queue becomes manageable again.

 

[Siggi]

As I understand VAT this is simply not true. The reclamation of VAT can only be done by the consumer; the retailer pays any taxes collected unless the consumer reclaims.

You don't understand it. The seller has no reason or obligation to collect VAT from a non-UK buyer (it's not required by the govt, VAT is for domestic purposes only...the UK govt extorting yet more money from its citizens) and thus doesn't. What Eastman is doing is pretending the displayed prices are ex-VAT when they are, effectively, not. International customers are paying the full UK VAT-Inclusive price and being screwed for 20% more than they should, THEN having to pay more tax in their own country at customs.

 

[Siggi]

The second aspect is that for several years almost all manufacturers have had a significant backlog stretching their production queue out to crazy lead times of a year or more, sometimes two. When that’s the case the mfg only has one tool to correct and that’s to raise prices until demand slows enough that their queue becomes manageable again.

Totally irrelevant and fanciful anyway. In Eastman's case, their stated max lead time is four weeks, so they're hardly snowed under.

 

[Siggi]

OP, we are talking about a £1,649.99 leather jacket here so if a 20% makes such a tremendous difference to you that you have to make 13 minute Youtube video about it, perhaps this isn't something you should be in the market for.

Maybe you shouldn't be in the conversation if you can't understand it's about the principle.

Which, anyway, in no way diminishes the significance of hundreds of pounds/dollars/yen/whatever excess in prices.

 

[Aloysius]

Why do you have a whole topic and video on the topic when this has always been Eastman's policy, not something they hide? Easily seen if you add an item to cart.

And why is your profile picture the Japanese fascist symbol?

 

[MrProper]

International customers are paying the full UK VAT-Inclusive price and being screwed for 20% more than they should

What do you mean, should? Foreign customers pay the price the company sells the jacket for. The company could also remove VAT and instead apply a 20% price increase for exported goods. It amounts to the same thing. Would you prefer that?
The simple fact is that if you don't like the pricing policy, you are not forced to buy the product. It's not as if a jacket like this is a daily necessity for survival.
The pricing policy may not be nice, but it's not a s c a m.

 

[ABCD]

I recently visited Japan where I bought a bunch of clothing. Some stores offer tax free shopping, waiving the 10% domestic VAT for foreign customers. Offering this service comes with a lot of paperwork and extra proceedings at the checkout.

Some stores think it's worth the extra overhead because tax free shopping will attract more tourists to their stores. Brass Tokyo, Gladhand, Schott, Fullcount and many others offered the service.

Other stores do not think it's worth the overhead, think of The Real Mccoys, Freewheelers, Fake Alpha, Black Sign Main Lodge (they used to offer tax free shopping but not anymore). I guess they can't be bothered because foreigners / tourists will buy from them either way, with or without the VAT.

Are they s.c.a.m.ming tourists by pocketing the 10% VAT? No, because they are not pocketing the 10%. They are simply treating foreigners the same as domestic buyers. Foreigners pay the VAT included price, the retailer pays the collected VAT to the government.

Eastman decided not to offer the service. So what? They are probably not losing too much business over it, similar to RMC or Fake Alpha (and many other retailers who do not think it's worth the extra overhead).

 

[Tom71]

Not meaning to be rude but that's a whole lot of words to express something so nonsensical.

A UK resident buys a .50 cal B3, pays £1649.
Eastman pockets £1319, the UK govt gets £330 in tax.

An American (or whatever) buys the same jacket, pays £1649.
Eastman pockets £1649, the UK govt gets nothing.

It's not rocket science and neither is it difficult to discover Eastman are doing it deliberately AND doing their level best to hide it.
Nor is it expensive or difficult to install software that removes VAT for international customers. Good grief, quite the opposite and I'm not aware of a SINGLE UK seller that doesn't have that function built into their checkout OR visibly says to contact them for a non-VAT price.

Eastman are snide spivs, deliberately choosing to profiteer from the ignorance and trust of non-UK buyers. It's not only financially despicable, it's an expression of contempt and disrespect too. International customers are being taken for mugs.

i don’t know what your issue with Eastman is, but they are neither ****ming customers nor are they pretending fake prices.

But as a “Brit living in Japan” I do have a solution for you:

Have a friend pick up the jacket for you in the UK. He pays VAT, and Gary gets his sales prices minus VAT. That’s important for you, righ?!
Next have the friend ship the jacket to you. You pay the original price plus UK VAT plus Japanese VAT and customs (as a very righteous person, you do declare all values, of course).
This way, nobody gets “****med”, and all is in order.You even supported two governments with your tax dollars.

You seem to misunderstand the concept of VAT. It’s the state adding the tax margin on every step of the production and sales chain of any product, not the the seller playing around with it.

As @ABCD noted, it involves manual work to deduct VAT for selling abroad, not just a “computer program”. You basically need a separate sales progress, including accounting system.
Yes, it can be done, yes, some do it, but you need a certain revenue for it to be it worth the effort.

One other thing. You wouldn‘t know what extra effort arises for a small business to ship abroad (neither do I in this case).
You need to identify a suitable courier, get on board with his system, maybe they don’t collect the orders at your place, you get questions from customs offices wherever you ship etc.).
Maybe it’s not even a profit-margin but rather a necessity to cover extra expenses.

In any case it’s not specific to Eastman. Most small sellers do and all of the US companies as well.

Accusations involving criminal behaviour and the notion that the customer is somehow misled or disrespected are wholly inappropriate here.

 

[RDS]

I’m no tax expert, however back on 1st January 2021 in its wisdom the UK government discontinued tax-free shopping for international travellers shopping in the United Kingdom.
So, is it possible that Eastman, and other companies who do similar, are simply treating mail order/internet sales to addresses outside the UK the same as if the items had been bought within the UK ?

Presumably Eastman, and the other companies who do similar, could offer VAT free shopping to international customers, and incur whatever costs there are in doing so; however the fact that they choose not to, and the full retail price is clear at time of purchase, is far from being a s.c.a.m.

To make accusations that a company is doing something underhand, presumably one has to have pretty extensive knowledge of the company’s financial affairs, including their accounting and tax declaration practices, otherwise might they not be leaving themselves open to some sort of legal action ?

 

[barnabus]

Maybe you shouldn't be in the conversation if you can't understand it's about the principle.

Which, anyway, in no way diminishes the significance of hundreds of pounds/dollars/yen/whatever excess in prices.

From what I can see here, the principle is that you object to paying the same for something as everybody else does.

And if you buy the jacket, Eastman is making more profit from the sale than you feel they should.

Is that correct?

 

[ABCD]

As @ABCD noted, it involves manual work to deduct VAT for selling abroad, not just a “computer program”. You basically need a separate sales progress, including accounting system.
Yes, it can be done, yes, some do it, but you need a certain revenue for it to be it worth the effort.

You're right, it entails more than just a computer program. Also, computer programs aren't free either.

Because of the extra overhead, some small Japanese retailers have outsourced the process to third parties like Pie VAT. The foreign customer pays the VAT included price at the checkout, uploads his receipt and a copy of his passport via the Pie app and gets an 8% refund paid out via PayPal. Pie pockets 2% for the service provided.

Nothing in this world is for free, extra services like VAT deduction or refund cost money. It's up to the retailer to decide whether or not it's worth the trouble. Apparently, for Eastman it's not worth it.