Import tax/VAT from europe.

[Jon H]

Well, i have decided to bite the bullet and order my guitar from Germany. I got a notification telling me of potential delays due to disrupted logistics so we will just have to see what happens.

If i get smacked with a bunch of extra charges i will be straight on here to complain let everyone know how it works out.

[Rich too]

Jon, I am not sure what you are getting at. If Laser sells an engine to a customer in Germany it does not charge UK VAT. The supply is zero rated and you must have proof of export. Its the same as if you sell to anywhere else overseas - you must have sold to USA in the past?

The question of whether you should register for VAT in the other EU country is another matter - but that requirement is not new.

BTW - I speak not as a VAT expert, but as an accountant in general practice.

 

 

 

Edited By Martin Harris - Moderator on 06/01/2021 10:17:31

[Rich too]

HAHA! I have noticed that when importing from the US now, some companies deal with VAT/import duties during checkout - which is much better imho.

[Nigel R]

Posted by Rich too on 06/01/2021 06:33:28:

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!

Where you sell from?

Or where you sell to?

[Jon H]

Posted by Rich too on 06/01/2021 08:35:57:

Jon, I am not sure what you are getting at. If Laser sells an engine to a customer in Germany it does not charge UK VAT. The supply is zero rated and you must have proof of export. Its the same as if you sell to anywhere else overseas - you must have sold to USA in the past?

 

 

 

 

Yep, that is how we expect it to work, but where are you getting your information? is that a fact or an expectation? I ask as the problem we are having is that HMRC themselves do not seem sure and we have about 5 contradictory pieces of info on the matter. Some of the information we have been provided says nothing about VAT, some seems to imply we do not charge it, and some seems to imply we do. Every email, letter, web page and phone call we have trying to get a clear answer gives us a different answer and according to the accountancy firm we use, we are not alone in our confusion as nobody seems to be able to just explain what the procedure now is and they themselves are not able to confirm this expectation that it is not charged.

Frankly, i dont think anyone actually knows.

Beyond that, do we need to include full invoices in the box? do we need to put them outside the box as well? what customs forms do we need to fill out?

Again, the information we have been given is all contradictory and its very annoying.

This might all sound trivial, but we cant afford to send things out and have them lost or returned beaten up in a months time. Accurate information is essential, but i guess my hopes are a little high as the govt are involved and contradiction is pretty much de rigueur.

Edited By Martin Harris - Moderator on 06/01/2021 10:18:16

[David Ashby - Moderator]

Several users have reported posts on this thread where politics has encroached. Some posts have been moderated accordingly.

 

Edited By Martin Harris - Moderator on 06/01/2021 10:18:38

[Jon H]

Posted by David Ashby - Moderator on 06/01/2021 09:44:16:

Several users have reported posts on this thread where politics has encroached. Some posts have been moderated accordingly.

Edited By Martin Harris - Moderator on 06/01/2021 10:18:38

what did i do? i dont remember saying anything contentious

[Martin Harris - Moderator]

Apart from start the thread?

Nothing that I'm aware of but in case of confusion, I just moved some posts from the DB thread which had no relevance to it and everything to do with this one...

Edited By Martin Harris - Moderator on 06/01/2021 10:54:34

[Rich too]

Posted by Nigel R on 06/01/2021 09:20:18:

Posted by Rich too on 06/01/2021 06:33:28:

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!

Where you sell from?

Or where you sell to?

for instance, if you export from the UK to Germany

[Rich too]

Posted by Jon - Laser Engines on 06/01/2021 09:27:35:

Posted by Rich too on 06/01/2021 08:35:57:

Jon, I am not sure what you are getting at. If Laser sells an engine to a customer in Germany it does not charge UK VAT. The supply is zero rated and you must have proof of export. Its the same as if you sell to anywhere else overseas - you must have sold to USA in the past?

Yep, that is how we expect it to work, but where are you getting your information? is that a fact or an expectation? I ask as the problem we are having is that HMRC themselves do not seem sure and we have about 5 contradictory pieces of info on the matter. Some of the information we have been provided says nothing about VAT, some seems to imply we do not charge it, and some seems to imply we do. Every email, letter, web page and phone call we have trying to get a clear answer gives us a different answer and according to the accountancy firm we use, we are not alone in our confusion as nobody seems to be able to just explain what the procedure now is and they themselves are not able to confirm this expectation that it is not charged.

Frankly, i dont think anyone actually knows.

Beyond that, do we need to include full invoices in the box? do we need to put them outside the box as well? what customs forms do we need to fill out?

Again, the information we have been given is all contradictory and its very annoying.

This might all sound trivial, but we cant afford to send things out and have them lost or returned beaten up in a months time. Accurate information is essential, but i guess my hopes are a little high as the govt are involved and contradiction is pretty much de rigueur.

Edited By Martin Harris - Moderator on 06/01/2021 10:18:16

Jon, do you use a courier or post office? They can deal with this for you. We have a small company client that exports motorcycle parts to Europe. They have no issues at all. The company that they use for delivery deals with it all. PM me if you want. I could perhaps put you in touch with them - I imagine your volumes are not too far apart.

[Dickw]

Posted by Rich too on 06/01/2021 06:33:28:

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

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!

Does that depend on a definition of business? (genuine question)

If I order an item of say £70 value from a small business (single shop or a garden shed manufacturer) in Japan or USA for example, is that "busines" expected to register for VAT in the UK for what may be its only UK sale that year?

Dick

[Nigel R]

Posted by Dickw on 06/01/2021 11:20:41:

If I order an item of say £70 value from a small business (single shop or a garden shed manufacturer) in Japan or USA for example, is that "busines" expected to register for VAT in the UK for what may be its only UK sale that year?

Dick

That is indeed what HMRC have declared (as far as I can make out).

The EU have, by contrast, not - you can still do a standard export declaration here in the UK and allow EU customs to sort things out on their end. They will have (as of July 1st this year) a scheme like the HMRC one, but it will be optional, I believe.

Edited By Nigel R on 06/01/2021 12:07:18

[Nigel R]

Posted by Rich too on 06/01/2021 10:58:19:

Posted by Nigel R on 06/01/2021 09:20:18:

Posted by Rich too on 06/01/2021 06:33:28:

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!

Where you sell from?

Or where you sell to?

for instance, if you export from the UK to Germany

Registering in the UK is a given (ignoring the low turnover non-VAT registered type setups).

But, would I need to register in Germany if I wanted to export from the UK to Germany?

My understanding is, I don't need to at present, although it would speed things up and make things slightly cheaper for the customer (they wouldn't need to pay handling charges for the EU courier to handle customs).

[Jon H]

Posted by Rich too on 06/01/2021 11:01:41:

Posted by Jon - Laser Engines on 06/01/2021 09:27:35:

Posted by Rich too on 06/01/2021 08:35:57:

J

Jon, do you use a courier or post office? They can deal with this for you. We have a small company client that exports motorcycle parts to Europe. They have no issues at all. The company that they use for delivery deals with it all. PM me if you want. I could perhaps put you in touch with them - I imagine your volumes are not too far apart.

We use standard royal mail usually. DHL sometimes, but normally royal mail. Im not sure how this helps mind as i dont know what to charge the customer. With tax or without? That is the root cause of my confusion, as well as all the customs paperwork.

This is not helped by the fact that i am still very much alone here as the boss is still not recovered from corona so most of this back and forward is via whatsapp messaging as he tries to fix it from home.

Im sure we will get it sorted out eventually. At the moment its not super important anyway as i have nothing to sell I just find the whole thing very tiresome

[Dickw]

Posted by Nigel R on 06/01/2021 12:07:02:

Posted by Dickw on 06/01/2021 11:20:41:

If I order an item of say £70 value from a small business (single shop or a garden shed manufacturer) in Japan or USA for example, is that "busines" expected to register for VAT in the UK for what may be its only UK sale that year?

Dick

That is indeed what HMRC have declared (as far as I can make out).

...............................

Edited By Nigel R on 06/01/2021 12:07:18

[Rich too]

Posted by Jon - Laser Engines on 06/01/2021 12:45:23:

Posted by Rich too on 06/01/2021 11:01:41:

Posted by Jon - Laser Engines on 06/01/2021 09:27:35:

Posted by Rich too on 06/01/2021 08:35:57:

J

Jon, do you use a courier or post office? They can deal with this for you. We have a small company client that exports motorcycle parts to Europe. They have no issues at all. The company that they use for delivery deals with it all. PM me if you want. I could perhaps put you in touch with them - I imagine your volumes are not too far apart.

We use standard royal mail usually. DHL sometimes, but normally royal mail. Im not sure how this helps mind as i dont know what to charge the customer. With tax or without? That is the root cause of my confusion, as well as all the customs paperwork.

This is not helped by the fact that i am still very much alone here as the boss is still not recovered from corona so most of this back and forward is via whatsapp messaging as he tries to fix it from home.

Im sure we will get it sorted out eventually. At the moment its not super important anyway as i have nothing to sell I just find the whole thing very tiresome

You do not charge them any VAT. You just need to advise them that import charges will apply. Here is some useful guidance **LINK**

[Jon H]

Posted by Rich too on 07/01/2021 06:00:37:

Posted by Jon - Laser Engines on 06/01/2021 12:45:23:

Posted by Rich too on 06/01/2021 11:01:41:

Posted by Jon - Laser Engines on 06/01/2021 09:27:35:

Posted by Rich too on 06/01/2021 08:35:57:

J

 

You do not charge them any VAT. You just need to advise them that import charges will apply. Here is some useful guidance **LINK**

 

We have just received more information from SAGE and they say we do charge VAT...so..?

To be clear, i dont think we do, but we have at least 3 pieces of information now saying we should. Admittedly we have other information, some of which is also from SAGE, saying we dont charge it. 

 

 

Edited By Jon - Laser Engines on 07/01/2021 08:33:58

[Nigel R]

I'm a bit confused Jon - aren't SAGE the scientific advisory group?

What do they have to do with VAT/import/export regulations?

[Jon H]

Posted by Nigel R on 07/01/2021 09:24:51:

I'm a bit confused Jon - aren't SAGE the scientific advisory group?

What do they have to do with VAT/import/export regulations?

Nah they handle all our accounting and invoicing stuff

[FlyinFlynn]

This from 'Sage Advice' -

"You should ensure import and export for your business is dealt with by somebody who knows what they’re doing."

which, it would appear at this moment in time, Sage does not.

My take (formulated from https://www.gov.uk/government/publications/notice-143-a-guide-for-international-post-users/notice-143-a-guide-for-international-post-users) would be that you would NOT charge VaT on exports to the EU but you must be able to PROVE to HMRC at some point in the future that the items were exported. Of course, I cannot claim to be 'someone who knows what they are doing' either. I feel for you Jon.

[Jon H]

Its a right dogs dinner.

Our problem is we cant gamble on doing what we think is the right thing. We need to be sure and im sure other companies feel the same way.

What is so frustrating is the lack of clear information. How hard can it be?

Anyway. The boss is back in and on the case so i am going to focus on screwing something together.

[ColdLazerus]

SAGE :---Scientific Advisory Group for Emergencies a government body

Sage accounting :- a Plc that produces accounting software nothing to do with HM gov.

[Jon H]

Just a little update.

I decided to order my music stuff from Germany and expected to pay £66 in VAT, which is fine.

My actual bill seems to come to £92 thanks to some creative rounding on the VAT (66 rounded to 70) and the balance being a fee charged apparently for being allowed to pay the VAT? Either way, its a con job and makes importing things from Europe cost prohibitive.

When importing stuff from the US i think the fee is about 9 quid? But that is handed by HMRC. WIth Europe, just letting the shipping companies handle it basically means they can all charge what they like and screw everyone over.

[Phil McCavity]

There was a time not too long ago when buying from Europe was more expensive than buying from home then for a relatively short time we saw goods become cheaper, whether it was better will forever be open to debate but those days are gone now. Another 'new normal' that we'll get used to after a while.

Edited By Phil McCavity on 23/01/2021 11:45:11

[Nigel R]

Depends on the courier Jon.

RoyalMail charge £8, PF charge £12.

Couriers like DHL are using a formula like "4% or £12 whichever is greater". These fees can usually be found on their webpage. But you need to know which courier will deal with the customs/duty/VAT when your consignment arrives in the UK to know for sure what that handling charge will be. Some couriers are applying a higher fee for EU -> UK given the extra costs incurrent during the current confusion, as compared to what they charge for ROW -> UK.

You also get VAT on the handling fee, I think - double bubble.

Also, did you calculate VAT on the duty? Another double bubble from the HMRC.

Some or all of the above may not be 100% accurate.

Edited By Nigel R on 25/01/2021 11:00:46