Jump to content

Recommended Posts

5 hours ago, hjcjones said:

In the UK it is the case that the quoted price includes VAT unless it is expressly stated that VAT is payable in addition. 

 

 

That is only true if the seller is VAT registered.   In the music business there are many sole traders who are below the threshold for compulsory VAT registration and who choose not the register.

Link to post
Share on other sites
  • Replies 44
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

This  is  what  usually  happens  with  my  customers  although  one  American  sent  his  Pipes  back  for  adjustments  and, being a cautious  fellow ,  he  insured  them  and declared the  full val

In the UK it is the case that the quoted price includes VAT unless it is expressly stated that VAT is payable in addition.   

We currently use UPS for shipping both to the EU and the "Rest of the World". Prior to Jan 1st, VAT was payable on EU shipments, but not ROW. Their system has already changed so that VAT is not applie

1 hour ago, Theo said:

 

That is only true if the seller is VAT registered.   In the music business there are many sole traders who are below the threshold for compulsory VAT registration and who choose not the register.

Does that mean that they do or do not have to charge VAT on exported items?

Link to post
Share on other sites
4 hours ago, Don Taylor said:

Does that mean that they do or do not have to charge VAT on exported items?

 

It means they cannot charge VAT on any items.

 

In my own case, which I've already mentioned, Mark Adey is not registered for VAT so there's no UK VAT on the bellows I'm awaiting from him, but I am expecting to have to pay Irish VAT + Duty that will add around 25% to their cost... 😒

 

Link to post
Share on other sites
6 hours ago, Stephen Chambers said:

 

It means they cannot charge VAT on any items.

 

In my own case, which I've already mentioned, Mark Adey is not registered for VAT so there's no UK VAT on the bellows I'm awaiting from him, but I am expecting to have to pay Irish VAT + Duty that will add around 25% to their cost... 😒

 

 

Also, because Mark is not VAT registered, he will be paying 20% VAT to the UK government on the cost of his leather, card, linen, glue, tools, etc. and is unable to reclaim that expense, so he has to pass it on to his customers in the form of a higher purchase price, which further increases the tax due to the Irish government on import.

Link to post
Share on other sites

Some years ago, I purchased an instrument from the United States.

When it arrived in the UK, HMRC charged import duty of 3.8%.

Then they added VAT at 20%, which was calculated on the toal price INCLUDING the import duty.

Thus for every £100, £24.56 was added, not £23.80 as I had expected.

Link to post
Share on other sites

Something else just occurred to me. When I book a courier to send one of my products, I have to pay VAT on that (which I can't reclaim because I'm not a VAT registered business). I suspect that if I'm sending it to the EU, the recipient will then have to pay VAT on the full cost they paid including the courier's fee, so the delivery fee will get double-taxed.

Link to post
Share on other sites

We currently use UPS for shipping both to the EU and the "Rest of the World". Prior to Jan 1st, VAT was payable on EU shipments, but not ROW. Their system has already changed so that VAT is not applied to EU shipments, so this shouldn't be a problem for you.

  • Like 1
Link to post
Share on other sites
2 minutes ago, Bill Crossland said:

We currently use UPS for shipping both to the EU and the "Rest of the World". Prior to Jan 1st, VAT was payable on EU shipments, but not ROW. Their system has already changed so that VAT is not applied to EU shipments, so this shouldn't be a problem for you.

 

That's good to know!

Link to post
Share on other sites

For as long as I remember British Instrument makers seemed to enjoy a VAT advantage over their Dutch colleagues in that not having to be registered for VAT, they were effectively able to keep their prices lower than us. From January, VAT at the local rate has been applied to UK products sold in the EU and so any competitive advantage will have disappeared.  I suspect that it was anyhow a case of apples and pears because as has been pointed out in this thread, not being registered means you are unable to claim VAT back on your costs and materials and so your running costs are higher as a consequence. Still it did seem that the famous "level playing field" had a distinctive bump towards the UK penalty area, which bizarrely Brexit seems to have flattened...

 

However, to put the VAT question to the side - I still don't understand why customs duty should be applicable let alone come into the equation when it was claimed we had a zero tariff deal. Can anyone get their head around this?

 

Adrian

Link to post
Share on other sites
23 hours ago, Theo said:

 

That is only true if the seller is VAT registered.   In the music business there are many sole traders who are below the threshold for compulsory VAT registration and who choose not the register.

I expressed myself badly.  What I was trying to say is that the price you see is the price you pay (unless it expressly states that VAT will be charged in addition).  So if you see something priced at £100, you will pay that whether or not the seller is VAT registered.  If they are registered, they will then have to pay 20% VAT to HMRC so they will be left with only £80, whereas the unregistered seller can trouser the lot.  However, as has been pointed out, the unregistered seller pays more for their supplies because they can't recover the VAT they pay on these.

Link to post
Share on other sites
4 hours ago, adrian brown said:

Still it did seem that the famous "level playing field" had a distinctive bump towards the UK penalty area, which bizarrely Brexit seems to have flattened...

 

I think it's gone further than that.  A VAT-registered seller can now UK VAT when selling to a purchaser in the EU, who will then have to pay VAT in their own country when it is imported.  Assuming similar VAT rates, neither is any worse off.  However VAT will also be charged on an import from a non-registered UK seller, but they can only reduce the price by eating into their own profit margin.  Both parties are probably going to be worse off - it will now cost the buyer more now he has to pay VAT when he wouldn't before, unless the seller can reduce his price to remain competitive, which will reduce his profit margin.

 

I believe that strictly speaking duties are different from tariffs.  Duties are payable on all sales (eg duties on alcohol and petrol), whereas tariffs are only charged on imports and exports. We may have tariff-free trade but duties and possibly other charges will still apply.  

Link to post
Share on other sites
3 hours ago, hjcjones said:

I expressed myself badly.  What I was trying to say is that the price you see is the price you pay (unless it expressly states that VAT will be charged in addition).  So if you see something priced at £100, you will pay that whether or not the seller is VAT registered.  If they are registered, they will then have to pay 20% VAT to HMRC so they will be left with only £80, whereas the unregistered seller can trouser the lot.  However, as has been pointed out, the unregistered seller pays more for their supplies because they can't recover the VAT they pay on these.

I would suggest a slight change in the arithmetic there.

VAT is £20 if the total price is £120. If the total price is £100, VAT is £16.67.

Link to post
Share on other sites

Bearing in mind VAT is an EU specific tax.  The Uk is/has been "in" the VAT regime because of our membership of the EU and appears to have been either obliged to, or chosen to remain in it (for now) as we leave.  The EU plan ( see link below ) to change the way in which VAT is gathered by the burgeoning EU based "on-line" marketplaces due to a substantial level of ongoing Tax fraud.  That change will affect pretty much any business with an on-line selling platform, from 01/07/21.  Most obviously it applies to Ebay as an example who are already applying the process.

 

My guess is that the Uk, rather than leave on 01/01/20 with one VAT regime, that 'mirrored' the EU, ie. the regime the rest of the EU currently has, then alter the Trading Rules again in 7 months to what the UK already know is coming down the line, they unilaterally went early with the new rules and the EU will "fall in line" on 01/07.  As per the link, this requires on-line EU sellers to gather the VAT at point of sale ( unless certain complicated circumstances apply ) then pay the revenue to the appropriate area via that countries VAT registration scheme.  Whilst VAT is a generic EU tax it still has local rates 19% in DE, 22% in IT 20% in UK etc.  

 

The limit for said transactions for the Uk is already ( now ) €150/£135.....it will be ( via Euros ) in the EU too come 01/07.  Items "over" €150/£135 appear to be able to managed in one of two ways, either (i) the seller claims the VAT and then pays it to the relevant VAT authority, if registered to do so - which they 'should' be if doing lower value Trade, or, the item is Zero rated by the EU seller and the VAT will be charged to the buyer, at the point of entry via Customs as already happen now for "Non" EU / ROTW imported items, before it is released. 

 

It would also appear that "non" Online Marketplace purchases, even at €150/£135 and below can be VAT paid at the Customs point - again, as happens already with Non EU/ROTW articles, although there is some "Press" to the effect that some companies on the Continent are declining to sell to the Uk as they do not want to have to register for Uk VAT and have decided to stop selling rather than 'test the water' by sending, pending Customs and letting the Uk VAT charge VAT on entry. 

 

The extra cost/s will be incurred in those carriage/courier are charging due to Customs Doc's/handling by the Exporter and if an item does require a VAT charge on Import, by a charge for handling/administering the VAT etc by Royal Mail on behalf of HMR.

 

Customs forms via reputable on-line Courier services 'self-migrate', auto-fill or have fairly simple fields for preparation as part of the 'service' purchase.  Codes for items are pretty straight forwards from menu's.  

 

https://www.avalara.com/vatlive/en/vat-news/eu-2021-e-commerce-vat-package.html

 

https://www.avalara.com/vatlive/en/vat-news/uk-post-brexit-vat-on-e-commerce-b2c-imports.html

Link to post
Share on other sites
On 1/10/2021 at 3:46 PM, alex_holden said:

 

Usually true, but there are exceptions. Perhaps @Ciaran Algar would care to comment?

Sorry, I've only just seen this! We're currently trying to figure out the whole customs/VAT situation as we've had a couple of instruments go to Ireland and the Netherlands and have huge Duty added on to them. We're trying to get in touch with UPS (who we use as our courier) to find out specifically what the rules and regulations are but no luck so far- I've spent days researching the rules but they're hidden well away!

 All of our prices include VAT. We are VAT registered so before Brexit there would have been no difference between our prices overall to UK or EU customers. Obviously we may have to rethink how things are done if VAT is being added in EU countries as it wasn't before, but we're still very much in the learning stage of this whole agreement and we're figuring out as we go!

 

(I may have got some terminology wrong here because it's a world I'm very new to- apologies if so!)

  • Thanks 1
Link to post
Share on other sites

Ciaran, I hope that the business name Barleycorn doesn't trigger alarm bells as being in any way connected to the liquor trade, and consequently special attention (or incorrect taxation rates) given to your shipments. You need to be careful about just what information goes on Customs documents. and can be misconstrued, especially so if another language is involved.

 

 

Link to post
Share on other sites

Only one small data point, but I exported some spare parts to the Republic of Ireland (£50 worth) earlier this month via Royal Mail, and they arrived a couple of days ago without any extra tax or handling fees. Perhaps they are currently overwhelmed and only bothering to tax higher value shipments?

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


Make a Donation


×
×
  • Create New...