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Import tax/VAT from europe.


Jon H
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If I correctly understand that Government Policy Paper re VAT on goods purchased from overseas, it seems the "one man band" small suppliers of specialist equipment in Germany or the Czech Republic that I use will be required to register for UK VAT.

I can see that happening smiley

This means that the following types of businesses will have to register for UK VAT (if not already registered) and account for VAT to HMRC:

any business that sells goods directly (without OMP (Online marketplaces ) involvement) to UK customers where the goods are (a) outside UK at the point of sale (b) imported to the UK in consignments not exceeding £135 in value

Dick

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I think Dickw is correct, third paragraph under Outline of Changes here link 

Quote : 
Online marketplaces (OMPs), where they are involved in facilitating the sale, will be responsible for collecting and accounting for the VAT.

For goods sent from overseas and sold directly to UK consumers without OMP involvement, the overseas seller will be required to register and account for the VAT to HMRC.

 

Edited By PatMc on 02/01/2021 21:57:17

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Without agreement in EU law to enforce UK VAT collection by member states, then the process will have difficulty in succeeding. At this moment, the EU Commission is "upgrading" its website. IMO they have more important issues to deal with first. The dust will be in the air a long time before it settles.

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Posted by Stuart C on 03/01/2021 17:13:01:

Without agreement in EU law to enforce UK VAT collection by member states, then the process will have difficulty in succeeding. At this moment, the EU Commission is "upgrading" its website. IMO they have more important issues to deal with first. The dust will be in the air a long time before it settles.

That's what's not clear, if an un-registered EU shop posts something to a UK customer what will happen to it. But it looks like the easy way round this is for the EU shops just to sell via Ebay or Amazon marketplace and let them deal with the VAT. I'm sure Jeff won't mind making a few percent on each sale.

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Posted by cymaz on 01/01/2021 22:43:17:

We’ve had it good for many years. Getting away with import duties, vat, most- not all - of the time for our foreign purchases while the local model shop stands idle.

Now, I’m the first to admit, I’ve bought abroad....Europe, China, USA. It’s about time for the uk shop to get more of the orders.

If we have to wait for the uk order so be it, we’re going to pay more for it which ever way it comes in now. Right, that’s my head above the parapet

Edited By cymaz on 01/01/2021 22:44:30

Hear Hear!

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I see the comedy of errors continues with no sign of letting up.

Every other country on Earth handles tax at point of import, does it not?

"What will happen to purchases from HobbyKing European Warehouse?"

I would expect them to say they won't be dealing with UK customers.

At least until HMRC reverse that particular piece of stupidity.

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The BBC website says " This essentially means that overseas retailers sending goods to the UK are expected to register for UK VAT and account for it to HMRC if the sale value is less than €150 (£135). " But I wonder if that was in fact a misprint - I would expect it to be MORE than £135 rather than less. Surely it's the goods over 135 that would need to be taxed too, otherwise it's a loophole when you buy your next turbine or expensive camera etc etc - VAT free if you buy in EC countries!

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Posted by kc on 04/01/2021 18:02:43:

The BBC website says " This essentially means that overseas retailers sending goods to the UK are expected to register for UK VAT and account for it to HMRC if the sale value is less than €150 (£135). " But I wonder if that was in fact a misprint - I would expect it to be MORE than £135 rather than less. Surely it's the goods over 135 that would need to be taxed too, otherwise it's a loophole when you buy your next turbine or expensive camera etc etc - VAT free if you buy in EC countries!

It's not a misprint.

The VAT for goods over £135 will charged then collected on receipt, no doubt with the courier's fee (& the VAT on postage ?) added.

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Posted by kc on 04/01/2021 18:02:43:

The BBC website says " This essentially means that overseas retailers sending goods to the UK are expected to register for UK VAT and account for it to HMRC if the sale value is less than €150 (£135). " But I wonder if that was in fact a misprint - I would expect it to be MORE than £135 rather than less. Surely it's the goods over 135 that would need to be taxed too, otherwise it's a loophole when you buy your next turbine or expensive camera etc etc - VAT free if you buy in EC countries!

Don't get excited, there are different rules for over £135 so I doubt you will get anything VAT free (if you can still get it at all that is!).

No missprints - all as printed on the gov. website.

Dick

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Ok if it's not a misprint why is the limit not similar to the point at which duty is charged on items from China etc - about £18 according to reports.

If it's difficult to buy small consignments from Europe then maybe it's good for UK modelshops......the few that are left. Or a chance for some enterprising modeller to start an online UK service for unobtainable items.

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Posted by BackinBlack on 04/01/2021 19:38:44:

The naivety of the Civil service and their grasp of reality are ably demonstrated once again. I find it difficult to believe that they really expect non UK vendors to register for VAT with HMRC, then collect up to £27per transaction and pay it to HMRC.

Quite Absurd.

The civil service is merely implimenting government policy. That's their job and it's what we voted for in 2016.

Geoff

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It seems this is just following the new eu taxation rules which were due to be implemented on Jan 1’ but have been delayed due to the Covid situation: https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en explains in more detail.

my understanding of this is that the rule will apply eventually to every eu business, exporting to any other country, including other Eu member states, and is primarily designed to stop the “drop shipping” practices of certain Far Eastern companies in their attempts to avoid paying import taxes.
The expected border chaos at the ports may also play a part in some companies temporarily suspending sales to the UK, of course....

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"It seems this is just following the new eu taxation rules"

Except the EU, being rather cleverer than HMRC, decided to allow collection at point of import to continue.

Foreign companies can register, but it is optional. Thus trade continues as normal with EU to rest of world for small shops based outside the EU. Registered companies will be able to deliver quicker, as there is no holdup at border, and the purchaser does not foot the handling charge for the local post service; non-registered will be slower as the countries post service deals with VAT/duty.

"That's their job and it's what we voted for in 2016."

Getting rather political... As noted the only Brexit related point here is that HMRC have now been at liberty to mess up the implementation by themselves whereas the EU have instead managed to get the changes done better.

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Nigel, I was merely defending the civil service who have to impliment government (Tory or Labour) policy regardless of their own opinions/experience. I just think it's unfair to criticise them. They are required to be apolitical which must, at times, be very difficult, regardless of their own personal political persuasion. And, of course the 'we' referred to the result of the referendum and not necessarily an indication of how I voted or think.

Geoff

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Posted by Dickw on 01/01/2021 15:50:15:

My previous purchase from the Eu have always included VAT at the rate applicable in the country I was buying from, and no further costs added.

I recently purchase some electronic equipment from the USA and for an item at a cost of £124.96 (including postage) the courier charged me an extra £16.10 customs duties etc. (no idea how that was calculated so don't ask!)

I expect imports from the Eu will now be similar to imports from other places like the USA.

Dick

ps I have just found and downloaded the customs forms I may now need when sending an item back to the Eu for repair angry

Your, comment about,"no idea how that was calculated" is why I stopped buying from overseas. Courier companies never charged me the same "handling" charges twice! have you tried contacting these people????!!!!!!!!!

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HMRC do have a way of complicating  things. I would not panic about the VAT issue when exporting to the EU. Just zero rate the supply and retain proof of export. It’s the same as it’s always been for exporting to non-EU countries. Most couriers deal with the VAT and import charges at the other end.

useful info here: **LINK**

Edited By Rich too on 06/01/2021 06:13:35

Edited By Martin Harris - Moderator on 06/01/2021 10:14:59

Edited By Martin Harris - Moderator on 06/01/2021 10:15:35

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Posted by Dickw on 02/01/2021 12:11:48:

If I correctly understand that Government Policy Paper re VAT on goods purchased from overseas, it seems the "one man band" small suppliers of specialist equipment in Germany or the Czech Republic that I use will be required to register for UK VAT.

I can see that happening smiley

This means that the following types of businesses will have to register for UK VAT (if not already registered) and account for VAT to HMRC:

any business that sells goods directly (without OMP (Online marketplaces ) involvement) to UK customers where the goods are (a) outside UK at the point of sale (b) imported to the UK in consignments not exceeding £135 in value

Dick

The requirement for registering for VAT in a country where you do business is nothing new, although I doubt many have bothered in the past!

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That sounds great in theory Rich, but if it all goes pear shaped the company in questions will have to pay the tax out of its own pocket as going back to the customer is hardly a good look. Equally, you cant charge the customer and then get an angry phone call days later when they are hit with a request to pay the tax again. We would then have to partially refund the customer and its just a complete mess.

Until we get it sorted we are not shipping to europe either.

Edited By Martin Harris - Moderator on 06/01/2021 10:16:29

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