Buying stuff and VAT

[Sponge]

Folks,

After years of having nothing but brilliant praise for Aardvark, I have found a problem. They have been told by their accountants that they have to charge VAT on orders, even if they are being shipped outside of the Europe.

Us poor folk that have limited archery suppliers locally, all of which charge a small fortune, use international shopping to keep the costs down. Any orders over £120 get a 12.5% import duty to New Zealand so not getting double taxed helps.

I am currently ordering hundred of pounds of kit for my club and having to order it from Bowsports.

Are Bowsports (and Amazon and every other major supplier in the UK) wrong or is my favorite UK supplier pricing themselves unfairly from the market? Do we have any accountants that can confirm the rules?

Regards,

Andrew

[Watch_Man]

If they are on the fixed VAT accounting scheme used by many small businesses then they cannot reclaim VAT and therefore are effectively giving you an extra discount if they supply VAT free. In some cases the number of overseas orders a small business receives vs the cost of administering a full VAT system on a small turnover will make it more economical for them to turn down business from outside the EU.

We are in the same position when we order from the USA we get VAT and import duty charged. This includes tax on the shipping charge!

[Sponge]

Thanks Watchman, that would make sense.

As much as I want to support good small businesses, I can afford to pay the extra 17.5% fee.

Sponge.

[Old Bloke]

My companies export products all over the world including New Zealand. Concerning our postion and VAT, if in Europe our customer is VAT registered we do charge VAT at the current rate of 17.5% and the customer can claim the VAT back through their local system. All retail sales (and trade sales if customer does not have a VAT number) in Europe carry the British VAT rate at 17.5% and has to be charged. For *Exports* outside of Europe which includes retail (distance selling) and trade, we do not charge VAT. However, at the point of entry, for both retail and trade customers, the local VAT (if any) and duty/taxes are chargeable at whatever rate applies and that includes the inclusive shipping charge.

[WhitehartFB]

Originally Posted by Old Bloke

My companies export products all over the world including New Zealand. Concerning our postion and VAT, if in Europe our customer is VAT registered we do charge VAT at the current rate of 17.5% and the customer can claim the VAT back through their local system. All retail sales (and trade sales if customer does not have a VAT number) in Europe carry the British VAT rate at 17.5% and has to be charged. For *Exports* outside of Europe which includes retail (distance selling) and trade, we do not charge VAT. However, at the point of entry, for both retail and trade customers, the local VAT (if any) and duty/taxes are chargeable at whatever rate applies and that includes the inclusive shipping charge.

Spot on OB the important bit is that the company does have to be vat registered and have a vat number.
Anyone or company can voluntarily register for vat and the red tape that goes with it, including doing the governments tax collecting so it really needs to be in your interest - not just to get 17.5% extra off a Flat screen TV . Registration for VAT is compulsory if your annual sales are £67k+ per annum or even looks like being so at any point in the tax year.

Sort of related - Can anyone advise: if a non GB/EU citizen buys goods whilst on holiday here there used to be a customs form you could complete so the vat was not charged to them at point of sale, rather than the customer claiming it back at customs at the airport, is this still in operation - suppose I could look it up but maybe there is somebody on here that knows

[Hodgelett]

There is a get around import taxes...Germany has none.
And of course once it's in the EU - no further taxes.
But I think that's only applicable if you're buying direct from a non-EU country.

Whitehart: Frequently Asked Questions: VAT and HM Revenue & Customs: VAT

[Watch_Man]

If a company is turning over less than £150K then they can register for the flat rate scheme and it is an attractive proposition giving a !% extra discount in the first year. VAT does not have to be accounted for on each item sold but instead on the total turnover. This means that you effectively have to charge VAT on everything wherever in the World you are sending it.

[WhitehartFB]

Thanks W_M

This would have saved a lot of time many years ago

[JohnR]

Originally Posted by Watch_Man

If a company is turning over less than £150K then they can register for the flat rate scheme and it is an attractive proposition giving a !% extra discount in the first year. VAT does not have to be accounted for on each item sold but instead on the total turnover. This means that you effectively have to charge VAT on everything wherever in the World you are sending it.

I think that's not strictly true. My business trades in UK and overseas and we're registered for VAT on the flat rate scheme. Flat rate VAT is not calculated on total turnover, it's calculated on the turnover which is within the scope of UK VAT - including turnover at the zero rate. Export sales are outside the scope of UK VAT, so are not included in turnover for the purposes of calculated the flat rate payment.

But warning: my business is a consultancy. There are differences in the VAT treatment of supply of goods on the one hand and services on the other, although I wouldn't have thought they'd affect the rules for the flat rate calculation.

John

[Watch_Man]

Originally Posted by JohnR

I think that's not strictly true. My business trades in UK and overseas and we're registered for VAT on the flat rate scheme. Flat rate VAT is not calculated on total turnover, it's calculated on the turnover which is within the scope of UK VAT - including turnover at the zero rate. Export sales are outside the scope of UK VAT, so are not included in turnover for the purposes of calculated the flat rate payment.

But warning: my business is a consultancy. There are differences in the VAT treatment of supply of goods on the one hand and services on the other, although I wouldn't have thought they'd affect the rules for the flat rate calculation.

John

John

we dealt with a company who supplied a specialist item but would not supply VAT free to our customers outside the EU quoting the regulations of the scheme above. I'm not sure how it worked for him but he would never budge on it, always claiming he would lose money.