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

[Hellzero]

I didn't know that facts were politics.

[wateroftyne]

Just now, Hellzero said:

I didn't know that facts were politics.

Some facts are best discussed on Twitter and Facebook.

[wateroftyne]

I'm not going to play whack-a-mole with this thread. Keep it on the practicalities of the thread subject, or it's getting locked.

Edited December 31, 2020 by wateroftyne

[Al Krow]

@Steve Browning

Do you know what the VAT position is for private sales from Britain to NI and also from the EU to NI? 

I'm guessing that NI may be a sweet spot with no VAT from either the rest of GB or from the EU?

[Steve Browning]

The frank answer is no, I don't. I will investigate. My hunch is it'll be a nightmare. Many businesses have suspended sales to NI because it is so unclear. 

[gareth]

 

Vat means Value Added Tax

Its meant to tax the “value added” at each stage of production 

I agree it is unfair to charge full 20% VAT on second hand goods 

Music businesses in the U.K. will tend to be registered for VAT and will usually use a special scheme for second hand traders which is a margin scheme

So if the business buys a bass from us for £1000 and then sells it for £1200 it only has to pay VAT on the profit/margin of £200

This seems fair to me and is in the spirit of the original idea of VAT of it applying only to the added value

So it seems unfair to sell the same bass for £1000 to someone in Europe and that buyer then has to pay £200 VAT 

 

[HazBeen]

As half English, half Dutch having spent a large part of my early youth in the UK and my teens and adult life in NL all I can say is that I regret seeing all the polarisation, lying and political failure on both sides of North Sea. Can we please accept what is and move on. Neither side needs to add anything more to the intellectual side of the discussion, it is all just details from here on in. In my mind this thread can do with closing, it has run it’s course.

[Al Krow]

3 hours ago, HazBeen said:

As half English, half Dutch having spent a large part of my early youth in the UK and my teens and adult life in NL all I can say is that I regret seeing all the polarisation, lying and political failure on both sides of North Sea. Can we please accept what is and move on. Neither side needs to add anything more to the intellectual side of the discussion, it is all just details from here on in. In my mind this thread can do with closing, it has run it’s course.

Harry - totally understand the sentiment. Except I think it will be a fair few months before the message actually sinks in that there is now an additional 20% on EU <--> UK purchases of used goods, and we are just at 1 Jan.

I still come across BC'ers unaware that they will need to pay VAT on imports from Jersey and that's been the case since they brought VAT in, in the 70s! And this is a much bigger issue for forum members as there are a lot more sales EU <--> UK than from Jersey <--> UK or EU.

The "right thing" IMO is for a pinned notice to be put up on the FS along the following lines:

"When buying from outside the UK or from outside the EU (depending on where you are based) please note that local territory VAT rates are likely to apply".

I think we are all now (sadly) agreed that this will be the case and I hope the expertise of someone like Steve B will have given @ped the reassurance to do this and, frankly, no one is going to criticise him for putting that red flag up. 

Please could you and the mods give something along these lines consideration?

Edited January 1, 2021 by Al Krow

[Reggaebass]

I think this is an informative thread, I know very little about import charges etc, and lots of the vintage basses I look at are abroad, so it’s good info for me 🙂

[Steve Browning]

3 hours ago, Al Krow said:

@Steve Browning

Do you know what the VAT position is for private sales from Britain to NI and also from the EU to NI? 

I'm guessing that NI may be a sweet spot with no VAT from either the rest of GB or from the EU?

This was released yesterday - note the second bullet point. I believe that you will be treated as exporting the goods to NI. This was always the fear. his is the advice to carriers - who are the people moving your bass from the rest of the UK to your buyer in NI. Let me lo9ok further to see what it might mean for an NI buyer.

From 1 January 2021 you need a goods movement reference to move goods from:

• the EU to Great Britain (England, Scotland and Wales - for transit movements only
• Great Britain to Northern Ireland

You may need to use a goods movement reference for Northern Ireland to Great Britain movements (for example a transit movement).

This is a new requirement at ports using the Goods Vehicle Movement Service. You will not be able to move goods without a goods movement reference and you may face delays at the port.

This service brings together multiple declaration reference numbers into a single goods movement reference. This is to speed up the clearance of goods through customs.

[Steve Browning]

This was also released yesterday (by HMRC).

Under the obligations in the Protocol, import VAT will be due on goods that enter Northern Ireland from Great Britain (England, Scotland and Wales). The same will also broadly apply to goods entering Great Britain from Northern Ireland. However, existing flexibilities within the EU VAT rules have been used to ensure that the Government priority to minimise business impacts is met. In particular, Articles 201 and 211 of Directive 2006/112/EC mean that it is for the UK Government to determine important practical details as to how this will operate. Our approach will preserve the integrity of both the UK and EU single markets.

[Steve Browning]

I read this to mean that NI buyers will be charged 20% UK VAT. The second sentence suggests it works in reverse too.

I believe (note the believe) that the minimising business impacts refers to a VAT registered business being able to use postponed accounting (charging the VAT themselves and claiming it back). Private individuals do not have this facility.

Edited January 1, 2021 by Steve Browning

[Dad3353]

In effect, then, Ulster becomes, for GB import/export purposes, part of Eire. 

[Steve Browning]

3 minutes ago, Dad3353 said:

In effect, then, Ulster becomes, for GB import/export purposes, part of Eire. 

Yes. I suspect there are some corpses revolving at a much faster rate and a good few have slowed down!! 🙂

[lurksalot]

5 hours ago, gareth said:

 

 

Vat means Value Added Tax

Its meant to tax the “value added” at each stage of production 

I agree it is unfair to charge full 20% VAT on second hand goods 

Music businesses in the U.K. will tend to be registered for VAT and will usually use a special scheme for second hand traders which is a margin scheme

So if the business buys a bass from us for £1000 and then sells it for £1200 it only has to pay VAT on the profit/margin of £200

This seems fair to me and is in the spirit of the original idea of VAT of it applying only to the added value

So it seems unfair to sell the same bass for £1000 to someone in Europe and that buyer then has to pay £200 VAT 

 

•  

Doesn’t really work like that though 

Even if a business sells a product at a loss , they still have to charge vat on it if they are registered 

I do think it unfair to be charging vat on a used item/ private sale that had Vat paid on it when new , of course,  when you start crossing borders with the goods,  it gets messy 

 

[taunton-hobbit]

In the antiques trade, it used to be that vat was only charged on an item less than 100yrs old and then only on the profit margin - has this changed lately ?

😎

[gareth]

14 minutes ago, lurksalot said:

Doesn’t really work like that though 

 

Yes it does actually 

[gareth]

Here you go

https://www.gov.uk/vat-margin-schemes

[Steve Browning]

There are a number of margin schemes for different businesses, from antiques to holidays. 

The everyday evidence of this is when you buy a car and trade in your old one. There is specific wording on the invoice. 

Gareth beat me to it!

[Steve Browning]

Not sure how many music shops operate the scheme. 

[gareth]

Just now, Steve Browning said:

Not sure how many music shops operate the scheme. 

I suppose it depends whether they deal in s/h gear - if not no need

If they do perhaps they could business split it this was advantageous (and legal) - use margin scheme for business dealing soley with s/h goods and use regular scheme for business selling new stuff

[lurksalot]

Thanks for that 

not dealing in used goods I hadn’t realised these vat options existed ! 

[gareth]

1 minute ago, lurksalot said:

Thanks for that 

not dealing in used goods I hadn’t realised these vat options existed ! 

A pleasure 

[karlfer]

Massive thanks to @Steve Browning for all his work for us on this matter.

[triplebass]

maybe this was already discussed or  is out there somewhere, i didn’t read through all the links, i apologize...

but what if i was to pay for a bass through bank transfer or paypal and have it sent as a gift? or just borrowing or exchanging for a while amongst colleagues? what about luthierie work abroad? does the paperwork/form include such an option? it’s not like we have contracts or invoices (in my case at least), or is that mandatory?