Bringing goods from the EU

[Jake]

VAT doesn't have anything to do with Brexit - I think. It's a tax on goods and services and the tax falls due where the "supply" happens. If you buy something in a German store, it is subject to German VAT. If you buy it in the UK, it is subject to UK VAT.

That was the case, because we were in the EU. It used to be the case we would pay German VAT (19% or whatever it is) if we bought from a German store, and a German would pay UK VAT (20% or whatever) if they bought from a UK store.

Now, if we buy it from a German store it is German VAT-free but subject to UK VAT on import. And vice versa.

It's the fact that the VAT on an import from or export to the EU now needs to be accounted for somehow to the buyer's domestic tax authority rather than the seller's tax authority that causes the additional red-tape and bureaucracy.

 

[sploo]

That was the case, because we were in the EU. Now, if we buy it from a German store it is German VAT-free but subject to UK VAT on import.

That's my understanding (at least, based on the quotes I've had).

To be balanced; it's worth noting that, for example, Danish VAT is currently 25%. So with the UK at 20% it's possible that a moderately valuable purchase may end up cheaper than before Brexit (assuming there's little or no extra import fees on top of the 20% UK VAT). If any import/processing fees are added to small value purchases then that'll likely add on more than the 5% saving in the VAT difference.

 

[Jake]

Yes, quite so. Even more so if the UK cannot be bothered to collect VAT at all on low value imports (but then UK retail would be killed by that and the lost tax would have to be made up from some other taxation).

 

[JohnPW]

It's the bullet point at the end of your clip.

That section is not very clear:

Where the import OSS is not used, a second simplification mechanism will be available for imports. Import VAT will be collected from customers by the customs declarant (e.g. postal operator, courier firm, customs agents) which will pay it to the customs authorities via a monthly payment.

Where it says "Where the import OSS is not used", maybe it's referring to consignments of over 150 Euros:

Distance sales of goods imported from third countries and third territories in consignments of an intrinsic value of maximum EUR 150

 

[Jake]

Where it says "Where the import OSS is not used", maybe it's referring to consignments of over 150 Euros:

Yeah OK there's a little ambiguity there, but that is not how the EU version works. The seller is permitted to register for the V-OSS, and then can only use it in any case for single consignments worth under €150. Everything else is outside the V-OSS (seller who has not registered for the scheme, or a registered user who is sending a consignment worth over €150). There are no 'shalls' about the use of the V-OSS, it is all "mays", and very much incentive based in terms of simplifying trading.

The only bit which is more mandatory for foreign sellers is if they are third party sellers on an online platform based in the EU (say Amazon). Amazon will be forced to apply VAT on their sales and account for it for them.

 

[billw]

The only bit which is more mandatory for foreign sellers is if they are third party sellers on an online platform based in the EU (say Amazon). Amazon will be forced to apply VAT on their sales and account for it for them.

A lot of Amazon Marketplace sellers are VAT registered anyway, especially the Chinese ones.

 

[Yorkieguy]

In saying that BoJo has messed things up big-style, the corollary to that is that the country would be in far better shape had Jeremy Corby and his cohort - Dianne Abbot, Rebecca 'Wrong Daily', John McDonnel, Angela Raynor et al had been swept into power with a landslide majority. I really don't think so. There's a reason that Labour lost not one, but the last three General Elections and it's simple - you don't give the keys back to they guy that crashed your car. Corbyn as PM and McDonell as Chancellor (instead if Rishi Sunak)? Errm.....

Nothing will change.

 

[ivan]

Ali Express in China is now adding UK VAT to low cost orders. Orders over ~£135 are VAT free and the buyer will face a charge from the carrier or post office for VAT, handling, and any duty. Order from a foreign business that is ignorant of our wonderful scheme, and a consignment of any value (no more freebies) will attract VAT, handling, and duty.

 

[RobinBHM]

In saying that BoJo has messed things up big-style, the corollary to that is that the country would be in far better shape had Jeremy Corby and his cohort - Dianne Abbot, Rebecca 'Wrong Daily', John McDonnel, Angela Raynor et al had been swept into power with a landslide majority. I really don't think so. There's a reason that Labour lost not one, but the last three General Elections and it's simple - you don't give the keys back to they guy that crashed your car. Corbyn as PM and McDonell as Chancellor (instead if Rishi Sunak)? Errm.....

Nothing will change.

They didn't crash the car.....there was a global financial crash enabled by deregulation.

Not that either party has been great on the economy....they've both been around about the same.
It's an old trope one side is good and the other side isn't on economy.

 

[Terry - Somerset]

Problems with imports and exports to EU was expected.

Negotiation was shambolic - I can only assume leaders on both sides wanted to deny giving politicians and interest groups an opportunity for proper scrutiny and possible delay.

No one knew what the rules would be even a week before the transition period ended. Unsurprisingly the complexity of unwinding 40+ years of free trade has thrown up the completely stupid and ill thought through.

A more balanced judgement of the impacts should be made in a couple of months at the earliest. The UK and EU are clearly able to discuss and can modify detailed regulation and documentation.

These observations do not evidence my support for Brexit (the contrary is true). But to make a judgement after only five days is premature.

 

[RobinBHM]

But to make a judgement after only five days is premature

Anybody making claims of:

"oh look, there's no chaos, everything is fine"
OR
"Oh look, theres no benefits

Are just posturing, it's meaningless.


The reality of Brexit, good or bad, won't be known for years.....because Brexit has nothing to do with the emotive slogans of sovereignty or freedom which count for nothing but everything to do with the trading environment for commerce.

Business will adapt to its new business environment of UK outside of EU....and that will take time before a pattern becomes clear - I would say 5 to 10 years.

 

[Rorschach]

Anybody making claims of:

"oh look, there's no chaos, everything is fine"
OR
"Oh look, theres no benefits

Are just posturing, it's meaningless.


The reality of Brexit, good or bad, won't be known for years.....because Brexit has nothing to do with the emotive slogans of sovereignty or freedom which count for nothing but everything to do with the trading environment for commerce.

Business will adapt to its new business environment of UK outside of EU....and that will take time before a pattern becomes clear - I would say 5 to 10 years.

Umm, I was attacked when I said this including by people like yourself? You have changed your tune, not that I am complaining, it's a pragmatic stance to take.

 

[jcassidy]

Brexit has nothing to do with the emotive slogans of sovereignty or freedom which count for nothing

And yet formed the basis for both the BREXIT campaign and the negotiations... sovereignty sovereignty sovereignty, like a stuck record.
What about trade? "Sovereignty over our own affairs!!"
What about fishing? "Sovereignty over our own fish!!!"
What about travel? "Sovereignty over our own borders!!! Oh, and £350m a week for the NHS."

 

[billw]

And yet formed the basis for both the BREXIT campaign and the negotiations... sovereignty sovereignty sovereignty, like a stuck record.
What about trade? "Sovereignty over our own affairs!!"
What about fishing? "Sovereignty over our own fish!!!"
What about travel? "Sovereignty over our own borders!!! Oh, and £350m a week for the NHS."

I always felt that the sovereignty thing was like a dog chasing a car. What happens when dog catches up with car? Hasn't got a clue what to do with it. Just wanted it, and now.....dunno.

I asked my mum the same question because she's always harping on about it - she hadn't got a clue she just didn't want to be ruled by Germany apparently. Didn't fight in the war for that etc etc.

 

[sploo]

I always felt that the sovereignty thing was like a dog chasing a car. What happens when dog catches up with car? Hasn't got a clue what to do with it. Just wanted it, and now.....dunno.

I asked my mum the same question because she's always harping on about it - she hadn't got a clue she just didn't want to be ruled by Germany apparently. Didn't fight in the war for that etc etc.

Based on the last few years of Brexit arguments: the first rule of Sovereignty Club is... to talk about sovereignty you don't know what sovereignty means (in the context being discussed).

 

[Peterm1000]

That was the case, because we were in the EU. It used to be the case we would pay German VAT (19% or whatever it is) if we bought from a German store, and a German would pay UK VAT (20% or whatever) if they bought from a UK store.

Now, if we buy it from a German store it is German VAT-free but subject to UK VAT on import. And vice versa.

It's the fact that the VAT on an import from or export to the EU now needs to be accounted for somehow to the buyer's domestic tax authority rather than the seller's tax authority that causes the additional red-tape and bureaucracy.

It's a question of place of supply... You can travel to Germany and buy in a German store and pay 19% VAT (which I believe you can get refunded on exit at an airport - never tried). Then you bring it to the UK and declare it to customs who will charge you import duty. However, if the German company sells to you and ownership of the goods transfers when you are in the UK, it is subject to UK VAT. Now it's much clearer that the place of supply is the UK and not Germany.

 

[billw]

It's a question of place of supply... You can travel to Germany and buy in a German store and pay 19% VAT (which I believe you can get refunded on exit at an airport - never tried). Then you bring it to the UK and declare it to customs who will charge you import duty. However, if the German company sells to you and ownership of the goods transfers when you are in the UK, it is subject to UK VAT. Now it's much clearer that the place of supply is the UK and not Germany.

Is that right? I thought you'd have to declare it for export from the EU and get a tax refund/exemption, and then you'd be liable for UK on import?

Whether you've paid EU VAT is neither here nor there as far as the UK taxman is concerned any more.

 

[Spectric]

Hi

This topic must have impacted what woodworking projects people have done recently unless you are finding the workshop to cold. It is strange that we spent all this effort to escape the EU and now we are looking at issues with importing from the EU, does it really mater. If you look at items that are around you, you will notice that they are mostly products from asia and the EU was probably just taxing us because they were not EU products so we must have a saving. We will always be taxed in the UK because any government needs money to fund pointless projects like Trident, HS2 and Hinckley C, and now there is also the massive debt created by the virus. I have always admired German engineering but that is now being sacrificed in the name of profit and we now have many more countries that we can trade with, without incurring the taxes and wrath of the EU. This mess should not have dragged on for so long, we should have reminded the french about Agincourt, Crecy, Poltiers, Trafalgar and Waterloo plus the fact that if it was not for us English they would all be speaking German now and they should be glad we want to trade with them.

 

[jcassidy]

not for us English they would all be speaking German now and they should be glad we want to trade with them.

I think you meant, if it wasn't for the Russians and Americans?

I mean, if I recall correctly, the Germans had ~60 divisions in Western Europe on D-Day, and somewhere in excess of 200 divisions trying to stop the Russians advancing on Berlin.

And before anyone says anything, my grandfather fought in Burma!

 

[clogs]

top marks Spectric......
u wanna try living with them......hahaha.....
whole different ball game there.....
Generally the low end workers where I lived (rural Charente) want to leave the EU.....
it's the suits at the top and bankers that want to stay......wonder why......??
what about the motorway built in the sea on FR. Reunion Island...€1.7 billion....where did that money come from....??????
it's a bit like the HS2 monster...the more money thats invold the easier it is to cream off the top.....
I wanted Brexit and I live in the EU.....it's not for our benefit .....think long term.....it's for the childeren....