Best Practice Recording Foreign Secondhand Goods

Client can obtain secondhand goods in Iraq but invoices/receipts are non-existent

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Hi there,

My client wishes to set up an eCommerce secondhand clothing store, through a UK Ltd company.

The secondhand goods are acquired through markets in Iraq but due to the cash-only economy in the country, obtaining receipts or invoices for such goods are non-existent. They would then be shipped to the UK through all the proper channels.

I assume the same issue would apply for purchasing secondhand goods in the UK. Receipts and invoices aren't commonplace.

What can my client do, record keeping-wise, to ensure HMRC is satisfied?

Many thanks!

Replies (7)

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By paul.benny
20th Apr 2022 15:55

Where is the local purchaser getting their cash from? Will that not give you some evidence of the purchase?

Who is organising the import and customs clearance? The shipper and clearance agent will have to declare a value.

Have you considered any AML issues? Cash purchases in a 'difficult' country raises a little bit of a red flag. It's non-obvious that import of second-hand clothing makes for a viable business. Ditto to the red flag.

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By lesley.barnes
20th Apr 2022 16:08

Have you had a look at this to see what the regulations are.

www.gov.uk/government/publications/iraq-sanctions-guidance/iraq-sanction...

I can't help with what paperwork HMRC would want to see but personally I would be suspicious Iraq doesn't seem to be the go to place for second hand clothing to sell on through a UK company. Could this just be a way of moving money to Iraq under the radar? Have they not considered buying from the UK second hand clothing market?

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By jonharris999
20th Apr 2022 16:26

If Mx Bona-Fide Iraqi Stallholder is not prepared to give even a handwritten receipt upon request for their wares, then I'm afraid they have to accept that their buyer for the UK export market cannot buy them.

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Replying to jonharris999:
RLI
By lionofludesch
20th Apr 2022 20:07

jonharris999 wrote:

If Mx Bona-Fide Iraqi Stallholder is not prepared to give even a handwritten receipt upon request for their wares, then I'm afraid they have to accept that their buyer for the UK export market cannot buy them.

Until they are, in fact, bought.

Which I guarantee will happen. It would be naive to think otherwise.

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By Roland195
20th Apr 2022 16:49

Even ignoring the questions around the unusual business model, it seems that focusing on the lack of a hand written receipt in any number of languages would be the least of your worries.

From the UK perspective, this comes up all the time - Your client gets duplicate books printed up & fills them out with the seller's details. Even with this, many won't comply & you cannot exactly demand to see ID so it's really just about documenting as much as possible at your end.

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By Paul Crowley
20th Apr 2022 17:20

Not sure that this is one that I would choose to act for
Products and money going in the wrong directions

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Caroline
By accountantccole
21st Apr 2022 12:01

Presumably there will be a papertrail with value for the import docs ?

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