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VAT and Import Duty.


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Therein lies the dichotomy for 'private' purchases ( sale ) and "business" ie., ones requiring EORI

https://www.gov.uk/export-goods

 

The line between the two is not clear, but between Uk & Europe ( or vice versa ) VAT should only be paid once.  As I understand it, if I buy an expensive item from the EU, ie. over £135 value, I would "expect" the EU seller to sell it Zero rated for "export" out of the EU and I expect to pay VAT ( not "Duty" per se ) via Customs at a rate of 20% +(sadly) handling charge on import.  The exception would be IF the seller was reg'd for VAT in the Uk due to the amount of trade the company/individual did with the Uk, in which case they may include Uk VAT in the price. 

 

The same should apply to a sale to Ireland/Netherlands at a price of over £135 ?

 

It is exactly the same principal as if I but from the USA/Canada.

 

If I buy "on-line" from Europe, I expect the OMP 'on-line marketplace' to charge and administer the VAT between the 'states' under the new agreement outlined in the link above.   That is what Ebay USA has been doing for 'some time' in their 'Duty charges'.  In the case of the USA it "is" Duty, Duty = VAT if buying from Europe.

 

I have had recent parcels rom Germany, post-Brexit, no problems with customs forms or charges (VAT paid) via Ebay.  Carriage charges are marginally more expensive.

 

"If" I was a "business" and needed to organise customs declarations/EORI's etc to import/export and make advanced declarations it would no doubt be more complicated and more expensive but should not incur more "Duty"/VAT per se if the process is followed.

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1 hour ago, Sprunghub said:

Therein lies the dichotomy for 'private' purchases ( sale ) and "business" ie., ones requiring EORI

https://www.gov.uk/export-goods

 

I don't really understand EORI numbers. Should I have one, as a non-VAT-registered sole trader exporting goods from the UK? Nobody has asked me for one yet.

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Wow, this discussion makes my head spin. I thought of the US tax laws as complicated (as I contemplate how to calculate mine after a financially unusual year), but I won't complain about it now. Best of luck across the pond, and be safe.

 

Ken

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7 hours ago, alex_holden said:

 

I don't really understand EORI numbers. Should I have one, as a non-VAT-registered sole trader exporting goods from the UK? Nobody has asked me for one yet.

 

Funny you should ask Alex - I sent 4 parcels with DHL express last week, 2 to the USA and 2 to Australia and one of the US parcels was held up while I got a request from DHL for my EURI number. I'd never heard of one before, but I found mine on an old letter from the tax department. I've been using DHL and UPS for years and never been asked before, neither importing nor exporting. Maybe the authorities are tightening the system.

 

Adrian

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44 minutes ago, John Wild said:

https://www.gov.uk/search/all?keywords=eori&order=relevance

 

This is a link to the HMRC page about EORI numbers. Warning: not always an easy read.

 

yes, I found the sage link someone posted earlier somewhat easier to understand.

 

https://www.sage.com/en-gb/blog/eori-number-trade-brexit/#gate-b1a63862-3fa0-4a5e-bb67-c76b88bbc6b8

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  • 3 weeks later...

I went to ship some reed sets to the UK today and got the message that I need a VAT number to ship to the UK.  USPS is telling me I have to open an account with the UK and collect VAT and make quarterly payments of collected VAT.  This seems a bit odd, never heard of anything like this ever.  Don’t most countries handle their own customs taxing on their residents?

 

Most of what I send to the UK is over 135£ so maybe I can get around it for the time being.  Seems of that I would have to collect taxes for the UK and pay them quarterly.   

Cheers, Seth 

Edited by Seth
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7 hours ago, Seth said:

I went to ship some reed sets to the UK today and got the message that I need a VAT number to ship to the UK.  USPS is telling me I have to open an account with the UK and collect VAT and make quarterly payments of collected VAT.  This seems a bit odd, never heard of anything like this ever.  Don’t most countries handle their own customs taxing on their residents?

 

Most of what I send to the UK is over 135£ so maybe I can get around it for the time being.  Seems of that I would have to collect taxes for the UK and pay them quarterly.   

Cheers, Seth 

 

I'm far from being an expert in these matters and welcome correction from those more knowledgeable. To the best of my understanding, you shouldn't need to be VAT registered in the UK to export goods to the UK. If you choose to do so, there's a system called Delivery Duty Paid that you can use to pay the various taxes and fees in advance so the recipient doesn't have to. Otherwise, it should still work the way it always used to, where you fill out a customs declaration form, and the recipient gets a bill in the post that they must pay before the goods are delivered.

 

There have been recent reports in the British press about people ordering items from businesses in the EU, getting an unexpected demand from the carrier for taxes and fees, and refusing the delivery instead of paying to release the item. Naturally that must be a major headache and expense for the seller, so some of them are now refusing to ship to the UK or charging an extra handling fee for the extra hassle involved.

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As I 'read' it it is "an" option to become Regd. for (Uk)VAT and to charge 'Import Duty' at source and pay the VAT to the Uk, or it is "an" option to ship and for the Import Duty (at VAT level ) to be charged at the Port of Entry as is often the case?

 

The benefit of registering for VAT ( to your customer) being that the item is shipped "Duty Paid", so they do not get stung with handling charges/delay's/hassle etc when the Duty is claimed this side of the 'Pond'.  The 20% is paid as part of the purchase price.

 

Typically that is why 'most' Uk purchases via USA Ebay have the duty incorporated into the purchase transaction, ie. Bid price, + carriage price + Duty ( which USA Ebayers probably don't even see ? ).  When those purchases arrive here they come without the "We have a parcel, you owe us £x before we will deliver" message.

 

If I were a business, I would weigh up how many transactions I fulfil to the UK and whether for the sake of the £20 or so extra charge to the buyer here it was worth the trouble ( my guess is it would not be in just a few cases )

 

This "may" be a misread of the new rules by USPS and it may be worth looking at FedEx etc to see if they have a different attitude if USPS won't relax their position? 

 

Either way, it would be good to know how you resolve it ?

Edited by Sprunghub
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It  all  sounds  horrific  to  anyone  who  might  be  contemplating  buying or  selling    into  the UK.

 

My  question today  is:

   What  is  the  situation when  someone  living  outside  the  UK  wishes  to  trade  up  their  concertina  with  a UK  based  dealer ?      Example;  say  the  UK  dealer  will  part exchange  your current  instrument  , after  appraisal ,  when  you  buy another  from  them .  The  complexity  of  taxes  charged  coming in and  going out  could  be  prohibitive .

Edited by Geoff Wooff
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1 hour ago, Geoff Wooff said:

My  question today  is:

   What  is  the  situation when  someone  living  outside  the  UK  wishes  to  trade  up  their  concertina  with  a UK  based  dealer ?      Example;  say  the  UK  dealer  will  part exchange  your current  instrument  , after  appraisal ,  when  you  buy another  from  them .  The  complexity  of  taxes  charged  coming in and  going out  could  be  prohibitive .

 

I think that would count as the UK dealer importing the old instrument (paying VAT and maybe duty on its declared value), followed by them exporting the new one (with the client potentially paying VAT/duty on it depending on where they live). Presumably if the UK dealer is big enough to be VAT registered (like Barleycorn or Hobgoblin) they would be able to reclaim the VAT they paid on the imported instrument, but smaller traders who aren't VAT registered (like most of the individual repairers and makers) couldn't.

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2 hours ago, Geoff Wooff said:

It  all  sounds  horrific  to  anyone  who  might  be  contemplating  buying or  selling    into  the UK.

 

My  question today  is:

   What  is  the  situation when  someone  living  outside  the  UK  wishes  to  trade  up  their  concertina  with  a UK  based  dealer ?      Example;  say  the  UK  dealer  will  part exchange  your current  instrument  , after  appraisal ,  when  you  buy another  from  them .  The  complexity  of  taxes  charged  coming in and  going out  could  be  prohibitive .

 

My guess is Geoff that that someone would do best by making a quick trip to the UK with the old instrument, do the deal, pay UK VAT and then hot foot it home without anyone noticing. I doubt a single instrument would attract too much attention at the border and I'm advising my single UK customer this year to do exactly that. Hopefully in a year or two things will become clearer and established procedures will be in place, but until then, I think we will all have to improvise. At least we can take heart that we're not dealing in perishables...

 

Adrian

 

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Indeed  Adrian,  

 

it has  been that  way  with  my  customers  for  many  years.  Some  have  come from  New Zealand  and  the  USA  to  collect  their  new instruments !     I  bought a concertina from  Australia  a  few years ago,  this  century,  and  there was  no  duty  or  other costs  involved, though one  of my  American  customers  did  have  problems  trying to  send  an instrument  back to  me  for  adjustments.

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This is the message I get on Stamps.com when I try to print a label to the U.K.   It gives me a pop up box with further info and this is what it says.   This is also what I’ve found on the USPS website as well.  It does give me an option to bypass this but warns that it could be held in customs or returned.  

 

Some folks are saying this change is an EU thing that was decided before Brexit and the U.K. agreed to follow through even after leaving the EU.  It leaves me wondering if this will be an issue to EU countries as well.  Lots of confusion to go around.

 

Seth

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Edited by Seth
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Seth - it comes in, in the EU on 01/07/2021 it was always coming down the line for the Uk if we stayed "in" the EU and we just opted to go early rather than have two changes in the space of a few months.

 

I do not believe from all I can find 'here' that it is ( or probably ever will be ) "mandatory" for non Uk/EU businesses to have to register.  If you simply book and post the parcel via USPS/Fed Ex I suspect the parcel and Import Duty will manage itself, ie. it will arrive, Duty will be charged, on arrival and when paid it will be delivered. 

 

It will be held in Customs, until the Duty is paid, that is how it works, but it will not be a surprise.  It reads to me as if they are trying to 'steamroller' you as a business into signing up for the VAT process unnecessarily, albeit potentially usefully and if I were the buyer and knew what to expect, I would take the "pay Duty on arrival" option BUT I would need to be happy that I knew that I would be paying 20 / 22% + carriage and a Handling Fee.  This has been the case with many USA to UK transactions for 'ever' from non VAT reg'd companies  - Columbia Organ Leathers being a case in point.  "A" way to manage the situation for the 'savvy' and non risk-averse is via the declared (insured !!?? ) value of the goods depending on your perspective. 

 

It will undoubtedly be easier for the Uk Revenue, ParcelForce/Royal Mail/Customs and Buyers IF non Uk sellers sign up to be reg'd for the VAT because it will reduce the volume of parcels the Uk has to manage/process/administer, so it is a positive thing to do if the volume of goods you are processing justifies it.    

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