VAT and import duties

[icic]

Just trying to make sense of VAT or import duties on purchase made from the EU. For smallish to larger purchases. Does any one know the thresholds for VAT and import tax, think it’s over £135 for import tax, but seems less clear for VAT what the lowest threshold is. Asking as was trying to cost some items from sites such as calicap, busbox etc

 

[ReinholdMessner]

There's no longer a threshold for incurring import VAT. It sounds like you're thinking of "Low Value Consignment Relief", which was withdrawn with effect from 1/1/21. (LVCR most recently meant that imported goods below a purchase price of £15 were not subject to import VAT when entering the UK and was that thing which meant CDs from the Channel Islands were so cheap about 10 years ago, although I think the threshold was higher back then.)

I'd also guess that none of the items you're buying will be zero-rated (some food, children's clothes, blah blah) so best to work on the basis of 20% import VAT on all non-UK purchases.

(In hindsight, I'd remove the word "import" from my first sentence above. Strictly you'd be charged 'normal' VAT rather than import VAT on a sale below £135, but as Eeyore says, "it's all the same at the bottom of the river").

 

[Joker 1299]

Surely you either pay VAT in the country of origin, or on import to the U.K., not both.

 

[ReinholdMessner]

Surely you either pay VAT in the country of origin, or on import to the U.K., not both.

Yes that's always going to be correct. Which, if any, part of my post suggested otherwise? Happy to tidy up any loose wording...

Maybe it's the reference to 'normal' VAT? In that case, I should strictly have written 'UK supply VAT', i.e. what goes in Box 1 of a UK VAT return submitted by a UK VAT-registered business. I didn't mean Dutch/German VAT.

Either you'd pay "UK Import VAT", which is what gets paid at the port along with any Duty, or "UK Supply VAT" if the seller has a UK VAT registration.

The important point for this forum is that you should expect to pay UK VAT (at whatever rate, potentially 0%) on stuff bought from the EU. Since 1/1/21, any other answer is going to be wrong 99.9% of the time.

 

[Joker 1299]

Sorry, not being critical of your post. Just replying to the thread in general

 

[Kernowboy]

Have been looking at buying some wheels from a German supplier; they remove the 19% vat rate on their own website for UK orders so presumably the normal 20% rate would be payable on top of advertised price. Same supplier through e bay the price you pay doesn’t remove the vat. I have seen some articles that imply there may be special arrangements in place for online auction sales but it’s very unclear whether UK vat would be due on the e bay purchase - thoughts?

 

[B J G]

Going back to pre Single Market days.

You either paid all taxes in the purchasing Country or you paid the Tax Rate that was applicable in UK. Never no Tax.
Exception was for Government Service Personnel with certain criteria applicable to that. eg Nato Forces.

Aside - I notice that Tyreleader, who I got my wheels from, no longer list wheels only tyres.

 

[icic]

So if the seller removes the VAT at their end it will be due on arrival in the uk and be paid by the courier who will then require it paid before delivery ? What happens if the seller does not remove it, any chance of paying twice ? Plus if the seller does leave it (local VAT) is VAT payable in the UK or is this waved. Sorry still not clear after reading government site.

 

[Dr-Snickers]

There was an item last week that said that the agreement reached with the EU required all EU sellers who wanted to export to the uk would have to individually register with HMRC and pay the VAT at point of sale, rather than the purchaser paying at point of import.

There are a number of EU sellers who have now advised they won’t be shopping to the UK because of this. It apparently costs them too much money to register and then keep up to date with every change in VAT requirements the UK may make.

Will have to see if that turns out to be the case.

 

[icic]

That’s what I read too, it will stop sellers trading here. What’s seems unclear is that when you ship from anywhere else in the world if VAT is not paid at source it’s paid on entry. Don’t see why that would not be the same from the EU. Seller deducts VAT and then it gets paid on entry by customer via courier. If every supplier to the uk has to do this, huge amounts of suppliers will not trade with us .. can anyone clarify this ?

Sorry I mean if every supplier has to register for uk VAT huge amounts won’t bother

 

[ReinholdMessner]

Have been looking at buying some wheels from a German supplier; they remove the 19% vat rate on their own website for UK orders so presumably the normal 20% rate would be payable on top of advertised price.

Yes that sounds right.

Same supplier through e bay the price you pay doesn’t remove the vat. I have seen some articles that imply there may be special arrangements in place for online auction sales but it’s very unclear whether UK vat would be due on the e bay purchase - thoughts?

UK VAT should still be due on this transaction, and I expect you don't care that much whether it's collected as "import VAT" or "supply VAT" so let's not bog down too much in that side of things.

There is a set of rules governing "online marketplaces", which I'd assume includes eBay; at least, if it doesn't include eBay then I don't know what an online marketplace even is. I've never applied the rules in real life as they're quite new, and I do VAT in a different industry where they're just not in point, but it appears these rules apply where the goods are outside the UK (tick) and the consignment (parcel/s) is valued at under £135. Your wheels may well be over that threshold, in which case we need to go back to the 'normal' VAT rules even if you buy via eBay.

It's difficult to be 100% sure of the correct position because I don't have absolutely all the facts, but I can't think of any scenario where HMRC won't want their 20% on a cross-border sale of goods into the UK where the customer is a normal person, and the nature of the goods isn't 'zero-rated'. If the supplier (also?) pays 19% to the Finanzamt then my first thought is that the German supplier has just made an error on their German VAT return (which they need to correct with the German tax authority and not bother us with).

In any event, you should only be liable for 'net' sale price + 20% UK VAT, and any other answer means something's gone wrong somewhere!

 

[ReinholdMessner]

So if the seller removes the VAT at their end it will be due on arrival in the uk and be paid by the courier who will then require it paid before delivery ?

Probably, yes. I believe it's possible for a canny supplier to set things up so that they collect UK VAT from you at the time of sale, and give it to the courier themselves. But either way, UK VAT's due and it'll come out of your piggy bank eventually.

What happens if the seller does not remove it, any chance of paying twice ?

Yes. The risk here is that the seller charges and accounts for German VAT (thus making an error in Germany) when the law requires them to not charge/account for any German VAT at all. The HMRC Officer at the Port of Entry won't care and he'll still want his 20% UK VAT. The correct way of unwinding this is for the supplier to make an error correction in Germany then send you the 19% back, but good luck with that...

Plus if the seller does leave it (local VAT) is VAT payable in the UK or is this waved. Sorry still not clear after reading government site.

HMRC will always want their 20% if the goods come into the UK! If you're unclear after reading HMRC Guidance then I have more than a little sympathy - despite many's the year of professional tax employment, I can read the jumble of words that HMRC produce and often be further backward in my understanding of the issue than if I'd just read the law. The .gov.uk website is even worse, as it's taken from actual HMRC Guidance but then edited by non-tax experts to make it 'readable'.

 

[Kernowboy]

Really useful thanks, that helps; it‘s a minefield to the average lay person. The wheels are way over the £135 threshold, which also means that a mistake leading to paying a second whack of vat would be very costly. I have a bit of time and am still exploring UK sources but it sounds like steering clear of e bay in favour of direct options for these and/or similar would be wise for a while until things start to become clearer.

 

[Dr-Snickers]

An article on this very subject by the BBC:

Brexit: 'I was asked to pay an extra £82 for my £200 coat'

Shoppers buying items from Europe now have to pay customs or VAT charges on those above a certain value.

www.bbc.co.uk

 

[Dr-Snickers]

...and this was the original article I read from the beginning of the year:

EU firms refuse UK deliveries over Brexit tax changes https://www.bbc.co.uk/news/business-55530721

 

[Dr-Snickers]

Calicap.de have now updated their website:

 

[Wongo]

Have been looking at buying some wheels from a German supplier; they remove the 19% vat rate on their own website for UK orders so presumably the normal 20% rate would be payable on top of advertised price. Same supplier through e bay the price you pay doesn’t remove the vat. I have seen some articles that imply there may be special arrangements in place for online auction sales but it’s very unclear whether UK vat would be due on the e bay purchase - thoughts?

 

[Wongo]

It would be due on new items and certain goods (complicated), the retailer cannot include it in the price advertised that’s why there is a customs form to show the detail & value of tbe goods so HMRC add it and the courier/Post Office collects plus a handling fee.
It was all on the side of that bus remember?

‘Buy British’ is little more than a slogan once rules of origin are taken into account, it is a complete dog's breakfast,

 

[WelshGas]

It would be due on new items and certain goods (complicated), the retailer cannot include it in the price advertised that’s why there is a customs form to show the detail & value of tbe goods so HMRC add it and the courier/Post Office collects plus a handling fee.
It was all on the side of that bus remember?

‘Buy British’ is little more than a slogan once rules of origin are taken into account, it is a complete dog's breakfast,

So no different than it was before when buying from outside the EU.

 

[Velma's Dad]

So no different than it was before when buying from outside the EU.

That's not really the point is it? The motoring aftermarket in the UK is highly interdependent with continental Europe. This thread is about campervan accessories but there are similar post-transition issues, hassles and costs facing a lot of other specialist automotive sectors.

One example is motorsport. The UK's 'motorsport valley' alone (the cluster of businesses in the south Midlands and Oxfordshire) employs thousands in highly skilled jobs and contributes billions to the UK economy. It is highly dependent on European partners and customers, and needs to be highly responsive when parts or sub-assemblies need to be moved, often at short notice.

And even complete cars: eg you now have to pay several hundred pounds to get an international customs carnet to move a vehicle across the channel for a race or rally. Not an issue for Red Bull or Mercedes but significant for the lower levels of the sport that underpin the elite levels.

Having to get a visa for an engineer to travel for a short assignment in Toulouse or Munich is yet another administrative hassle that no-one needs.

None of these things are individually crucial to the sector but they add up to a whole bunch of hassles, costs and obstacles that didn't exist before 31 Dec in dealing with customers and suppliers. Saying that it's still no harder than doing business with Tunisia or Turkey or wherever is completely irrelevant isn't it.

 

[sidepod]

This may or may not be relevant but, I ordered an item from Bikester UK over the Christmas period.
Bikester are a German co but the website is co.uk and prices were/are quoted in £ including VAT and delivery. Item was showing at the time as "In Stock". Given it was a UK website I natrurally assumed in stock meant, well just that.
Total cost £645.

Today the item arrived from Germany. The UPS man on the door step demanding a further £125.

WTAF?

Probably going to have to take this one up the backside as the small print on the Bikester Website says "there may be additional duty to pay" or words to that effect.

All a bit pony really considering.

I voted Leave.

 

[Velma's Dad]

This may or may not be relevant but, I ordered an item from Bikester UK over the Christmas period.
Bikester are a German co but the website is co.uk and prices were/are quoted in £ including VAT and delivery. Item was showing at the time as "In Stock". Given it was a UK website I natrurally assumed in stock meant, well just that.
Total cost £645.

Today the item arrived from Germany. The UPS man on the door step demanding a further £125.

WTAF?

Probably going to have to take this one up the backside as the small print on the Bikester Website says "there may be additional duty to pay" or words to that effect.

All a bit pony really considering.

I voted Leave.

C'mon pod didn't you see the motorway signs before Christmas?

 

[B J G]

Proving to be very much a case of you don't know what you've got until you lose it.

Seems to be generating a huge employment opportunity for Administrators, pen pushers/form fillers.

Not sure if that's the job creation that was forecast by the Political Elite.

 

[WelshGas]

That's not really the point is it? The motoring aftermarket in the UK is highly interdependent with continental Europe. This thread is about campervan accessories but there are similar post-transition issues, hassles and costs facing a lot of other specialist automotive sectors.

One example is motorsport. The UK's 'motorsport valley' alone (the cluster of businesses in the south Midlands and Oxfordshire) employs thousands in highly skilled jobs and contributes billions to the UK economy. It is highly dependent on European partners and customers, and needs to be highly responsive when parts or sub-assemblies need to be moved, often at short notice.

And even complete cars: eg you now have to pay several hundred pounds to get an international customs carnet to move a vehicle across the channel for a race or rally. Not an issue for Red Bull or Mercedes but significant for the lower levels of the sport that underpin the elite levels.

Having to get a visa for an engineer to travel for a short assignment in Toulouse or Munich is yet another administrative hassle that no-one needs.

None of these things are individually crucial to the sector but they add up to a whole bunch of hassles, costs and obstacles that didn't exist before 31 Dec in dealing with customers and suppliers. Saying that it's still no harder than doing business with Tunisia or Turkey or wherever is completely irrelevant isn't it.

But those are EU requirements not UK.

 

[sidepod]

C'mon pod didn't you see the motorway signs before Christmas?

View attachment 72237

I was at home. Non essential travel. Obvs. I voted leave not take my pants down!