Buying from EU private sellers - 20% VAT from 1 Jan 2021

[Al Krow]

Summary from 1 Jan 2021

We should see no difference when buying from EU VAT registered retailers e.g. Thomann

But private purchases from EU will require a Customs declaration (and handling charges) plus VAT of 20% i.e. the same as when buying from US or Jersey / Guernsey 

 

To prevent any of us UK based BC'ers coming in for a nasty surprise in 5 days' time:

Prepare to import goods from the EU to Great Britain from 1 January 2021 - GOV.UK (www.gov.uk):

"From 1 January 2021, you'll need to make customs declarations when you import goods from the EU. These rules currently apply to importing goods from the rest of the world..."

"You need to pay VAT [and custom duty] on all imports."

On 26/12/2020 at 09:40, Steve Browning said:

That is my conclusion. There has been a small value threshold but that is being phased out and was only a small amount anyway. 

Goods bought from a private person in the EU just became at least 20% more. 

Steve - is a bit of an expert when it comes to VAT matters so worth heeding this!

 

@ped I think it may be worth alerting folk with a notice on the Sales Forums that they may well have to pay 20% VAT on imports of goods from the EU from 1 Jan 2021, at least so that they are prepared / it does not come as a nasty surprise particularly if they are buying an already expensive bass!

Edited December 27, 2020 by Al Krow

[Hellzero]

This is for people having a registered VAT number, not the common people.

Let's wait until the ratification of this Brexit deal on the 30th of December before making any suggestion, because it's not clear at all as nobody knows what these1500 pages text contains.

[ped]

As mentioned elsewhere I am not going to publish any advice or guidelines that suggest I know the deal because I think private sales won’t be affected. Let’s wait and see. 

[Al Krow]

[S Browning comment moved to OP for ease of reference].

Edited December 26, 2020 by Al Krow

[ped]

That’s one conclusion

[Silvia Bluejay]

Hang on, if we have to slap 20% VAT on things we buy from the EU, presumably that's after the seller discounted their own 21 or 22% tax from the price, because they're shipping something abroad. I don't think we have to pay VAT twice?

[Steve Browning]

8 minutes ago, Silvia Bluejay said:

Hang on, if we have to slap 20% VAT on things we buy from the EU, presumably that's after the seller discounted their own 21 or 22% tax from the price, because they're shipping something abroad. I don't think we have to pay VAT twice?

Absolutely right. We are no longer charged VAT by the EU business but pay UK VAT on importation. 

[Hellzero]

Are you VAT registered ?

[Guest]

We currently pay VAT on used goods from outside the EU above a small threshold (if that still exists?) We’re no longer in the EU, pending the details of the deal. It’s logical (but maybe wrong) to assume that buying used goods from the EU will require payment of VAT on arrival after 1 Jan. as has been said, until we get a definitive answer from the text of the deal the rest is just speculation. I think it is clear that duty won’t be levied, but that is only 3.7% for guitars (and basses).

[Silvia Bluejay]

8 minutes ago, Hellzero said:

Are you VAT registered ?

You don't need to be VAT registered to buy goods (and pay their VAT) as a private individual. In fact, I'll go as far as saying, from the point of view of us as buyers from, say, Thomann and similar, nothing should change, as those companies have always had a base price on which they calculated 20% VAT when shipping to the UK.

Private sales of second hand goods will follow different rules, I think.

[DiMarco]

Please include "selling to Europe" as well lads. This thread will be muy importante in a few days time.
Thanks so much for posting Al!

 

[wateroftyne]

2 minutes ago, DiMarco said:

Please include "selling to Europe" as well lads. This thread will be muy importante in a few days time.
Thanks so much for posting Al!

 

 

[DiMarco]

Thanks for the link. I have seen that post, but his question is specific to a current deal (we're still in 2020).

[Al Krow]

23 hours ago, DiMarco said:

Please include "selling to Europe" as well lads. This thread will be may be  important in a few days time.
Thanks so much for posting Al!

You're very welcome.

As folk have rightly pointed out - we should see no difference when buying from EU VAT registered retailers e.g. Thomann

The key issue is that from a UK perspective private purchases from EU - as Steve B (who is one of resident VAT experts) has confirmed, we need to treat purchases from the EU in the same way as we would from US or Jersey / Guernsey i.e. a Customs declaration plus VAT of 20%. This is the big change we need to be mindful of from 1 Jan.

I suspect it will be the same the other way around for UK private sellers selling --> EU from 1 Jan, but I'll leave our EU based BC'ers to confirm that.

Edited December 27, 2020 by Al Krow

[taunton-hobbit]

I think it's still too new & shiny to get worried unless you are heavily into import / export .............

The truth / full horror (depending on how you view it) will take a while to sift through.

( imo / ymmv / etc )

😎

[Steve Browning]

I have never figured out ymmv. What is the phrase? I know I will kick myself. 

[taunton-hobbit]

............. your mileage may vary ...............

😎

[Basinski]

I believe from what I’ve read elsewhere, that the EU/UK relationship with regard to buying and selling anything - including used goods - will be the same as the current UK/rest of the world relationship. So you’ll pay VAT and import duty on anything you buy, as will anyone you sell to within the EU. We become a third country. The VAT rates vary across Europe, you currently pay the local rate - the rate operable in the country of purchase - from January you’ll pay the UK rate, which might be higher.

Buying from somewhere like Thomman will be the same, though you’ll probably end up paying import duty on top of the VAT. Couriers will probably charge a little extra too, I know Royal Mail add a handling fee onto purchases from America.

Edited December 26, 2020 by Basinski

[BassBunny]

I regularly buy wine from Portugal and the retailer has informed me that prices will rise by 7% from Jan 1st.

This being the difference between VAT in Portugal of 13% and UK VAT of 20% so additional VAT on delivery should not be levied.

[Basinski]

25 minutes ago, BassBunny said:

I regularly buy wine from Portugal and the retailer has informed me that prices will rise by 7% from Jan 1st.

This being the difference between VAT in Portugal of 13% and UK VAT of 20% so additional VAT on delivery should not be levied.

That’s right, you currently pay the local rate of VAT, from January you’ll pay our rate. You’ll probably also pay a handling fee to the courier company for collecting the VAT.

[Steve Browning]

 

DHL seem to charge £11 or 2.5%, whichever is the greater, as an example. Luckily it looks as though Duty is not going to be charged.

[Graham]

12 minutes ago, Steve Browning said:

 

DHL seem to charge £11 or 2.5%, whichever is the greater, as an example. Luckily it looks as though Duty is not going to be charged.

DHL have also brought in a €0.25/Kg/€5 minimum Brexit surcharge for imports into the UK, so there's that as well

[Al Krow]

I've summarised the key take-aways in the OP for ease of reference.

All those GAS inducing basses (and other gear) in the FS from EU based BC'ers are going to be 20% more than their listed prices...

[Burns-bass]

2 minutes ago, Al Krow said:

I've summarised the key take-aways in the OP for ease of reference.

All those GAS inducing basses (and other gear) in the FS from EU based BC'ers are going to be 20% more than their listed prices...

More because of handling fees to administer the levy. Say an additional 5%.

[Steve Browning]

On 26/12/2020 at 09:27, Al Krow said:

Summary from 1 Jan 2021

We should see no difference when buying from EU VAT registered retailers e.g. Thomann

But private purchases from EU will require a Customs declaration (and handling charges) plus VAT of 20% i.e. the same as when buying from US or Jersey / Guernsey 

 

To prevent any of us UK based BC'ers coming in for a nasty surprise in 5 days' time:

Prepare to import goods from the EU to Great Britain from 1 January 2021 - GOV.UK (www.gov.uk):

"From 1 January 2021, you'll need to make customs declarations when you import goods from the EU. These rules currently apply to importing goods from the rest of the world..."

"You need to pay VAT [and custom duty] on all imports."

Steve - is a bit of an expert when it comes to VAT matters so worth heeding this!

 

@ped I think it may be worth alerting folk with a notice on the Sales Forums that they may well have to pay 20% VAT on imports of goods from the EU from 1 Jan 2021, at least so that they are prepared / it does not come as a nasty surprise particularly if they are buying an already expensive bass!

I did suggest that but the idea was rejected.