Tax on goods from EU surely not correct?

[floridapalmtree]

Husband has just had messages from DHL saying they will not deliver goods until £67 tax and import duty is paid. This is on clothing of £240. So 20% added. The items were ordered on 29 December so before Brexit exit.

Sister in law also ordered some goods from same company, also on 29 December, which were delivered yesterday but didn't have any tax to pay, think she may have spent less though.

AIBU that this is too much money? or is this just the way things are going to be post Brexit?

@Twatalert

OP, this is a mistake. The 20% would have to be applied in the case of a No Deal Brexit, but since we got a deal it is quite possible there is no VAT on mens clothing. I don't know what exactly you ordered, but this link is for mens suits for example:

www.trade-tariff.service.gov.uk/commodities/6203110000#import

(hope it works). It clearly says 0 VAT if of EU origin (Tariff preference).

People here are ill informed. There won't be VAT, import duty or whatever for gifts from Europe and I am pretty sure most EU sellers can continue to ship to the UK without that additional cost. Depends of the type of good obviously, but VAT and import duty are typically nil.

Funny that the UK government don't seem to be as well informed...

Consignments valued at £135 or less
The seller must charge and account for VAT at the point of sale, unless the consignment is a business to business sale and the customer has given them their UK VAT registration number.

To charge and account for VAT the seller will need to:

know the precise nature of the goods to find out the correct rate of VAT to charge
register for VAT - sellers that are already registered for VAT do not need to re-register
keep records of the goods sold, and make sure they get accurate information to apply the correct VAT treatment to them

www.gov.uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk#threshold-for-distance-selling

Perhaps they haven't gotten around to updating your link yet...

As mentioned upthread the irony of all the frothing (on any side) is that this is actually the result of some EU changes which the EU has postponed until July but we haven’t.

@GoldfishParade

So does this apply to people providing services? For example a graphic designer working freelance for a client in germany or Italy?

No - you should refer to the Place of Supply rules for VAT purposes. As it's a service and (presumably) you're providing services to a business in one of those countries, your "place of supply" is deemed to be the country in which your customer is based.

This would then be classed as "outside the scope" of VAT as it outside the UK and no VAT is chargeable. This is technically different to how it was before we left the EU, as before, if it was a fellow EU country you still didn't charge VAT but the receiver of the services should have recorded VAT as a "reverse charge" (sounds more complicated than it is!)

If you are supplying services to an individual then your place of supply is the UK and you'd have to charge UK VAT. This is also no different to before we left the EU.

SusannaSpider
Hang on... that link seems to suggest that the small item waver for goods under £15 has gone for buying from any country (not just EU). We often buy small bits of stationery or haberdashery from Wish (China) etc. Never pay tax as we are only talking small purchases. So will it be taxed now?

Yes

Actually on double checking the answer is no. It's only small purchases from the EU that will be taxed. I'm still safe buying tat from China if under £15 (inc p&p, thought it used to be £18, but never mind).

Meant to add the HMRC link - www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#contents

Higher import tax = less imports = more UK sales, less impact on the environment and also gives UK manufacturers/producers a better chance of being able to compete with cheap imports. This may not be good for our personal finances, but in the long run, should revive UK industry.

@DynamoKev
What do you mean?

@TigerDrawers
Thank you!

As mentioned upthread the irony of all the frothing (on any side) is that this is actually the result of some EU changes which the EU has postponed until July but we haven’t

Not really, no.

@amusedtodeath1

Higher import tax = less imports = more UK sales, less impact on the environment and also gives UK manufacturers/producers a better chance of being able to compete with cheap imports. This may not be good for our personal finances, but in the long run, should revive UK industry.

With this tiny detail that products of any UK producers who previously sold to EU customers will become more expensive for those customers, who will also start preferring local products.. We must hope UK customers will go on proper shopping sprees to make up for this shortfall.

@BiarritzCrackers have you got a link to that Etsy thread by any chance? I can't find it.

The implication is that this seller is not VAT-registered with the UK.

Afaik overseas sellers are eligible to register for VAT in the UK and reclaim import VAT back (subject to the standard rules for VAT deduction).

They can also postpone VAT payments (rather than having to pay it upfront and declare it later) they can declare & recover VAT in the same VAT return.

But all of this costs money & time in admin. Which is why despite free trade being tariff-free does not mean it is customs free or 'frictionless' as it was in the SM + CU.

@DynamoKev - As mentioned upthread the irony of all the frothing (on any side) is that this is actually the result of some EU changes which the EU has postponed until July but we haven’t.

And as mentioned upthread, no it's not. The EU have VAT changes planned that will make things simpler and more efficient for companies selling elsewhere in the EU. The UK is no longer in the EU so these chages don't apply.

rather than having to pay it upfront and declare it later

This should say pay it upfront and recover it later.

@PolarExpressislate

So predictable that Remainers are still moaning bitter whingebags.

Errr... who is saying that the OP is a Remainer?

Or are you talking about people saying it’s normal and unsurprising?

@TatianaBis

The implication is that this seller is not VAT-registered with the UK.

Afaik overseas sellers are eligible to register for VAT in the UK and reclaim import VAT back (subject to the standard rules for VAT deduction).

They can also postpone VAT payments (rather than having to pay it upfront and declare it later) they can declare & recover VAT in the same VAT return.

But all of this costs money & time in admin. Which is why despite free trade being tariff-free does not mean it is customs free or 'frictionless' as it was in the SM + CU.

Well seeing how short notice everything was, I don’t think it’s surprising most. Companies aren’t VAT registered.

However this is going to be a hurdle that some EU companies won’t be happy with. They might well decide not to bother with the uk.

@amusedtodeath1, what are the UK manufacturers going to make all the alternative products out of, where will these raw materials come from, and how much will it cost them to buy and perhaps import?

@amusedtodeath1, it’s also likely that that same product manufactured in the U.K. will be more expensive because the market is much smaller

Hang on - I’ve just realised the OP’s total was 240, so the rules above for reclaiming VAT don’t apply - they only apply up to £135.

For those of us old enough to remember the days before the single market
VAT on all imports is perfectly normal

When we warned you that this was a predicted outcome of Brexit
it was not Project Fear
it was REALITY

Either way - foreign online sellers have to register for U.K. VAT, collect the tax and pay HMRC. So EU sellers have to charge U.K. VAT rates when they used to charge their own VAT rates.

Not sure about your particular case because of the buying date, but yes - this IS how it's going to be now. And it IS that expensive, yes.

As another poster said in as many words, thanks Brexit fools.

Oh, and it's the tip of the iceberg - this is just the first consequence you've actually noticed. Whether or not we have tariffs (deal, so no), it's going to be longer, more complicated and more expensive to transport everything across borders, so lots of prices will go up regardless.

Serve u right for buying forrin.

Brighterthansunflowers Plenty of cheap clothes and offers here in the UK so...

Either way - foreign online sellers have to register for U.K. VAT, collect the tax and pay HMRC. So EU sellers have to charge U.K. VAT rates when they used to charge their own VAT rates.

So is this to deter people from buying outside the UK or is it another example of "do they not know who we are?" thinking and an assumption that any company outside the UK would be honoured (tugs fore lock) to jump through all sorts of hoops in order to supply the wonderful citizens of the UK?

The remoaners are going to be exhausted like for ever... 😂😂😂