Equipment purchase from the EU

[scrw.]

Please don't turn this into a brexit thread (although it is one in a way)

Was planning to do a purchase of equipment from the EU this year (~£30k), and have been saving the cash so I could buy it in august. Given that post March there could be import duty to pay on the kit is it worth buying now? if buying now i would need some funds from the bank, however would be able to clear the loan this year. Or do I wait until August as planned and buy with cash hoping the £ hasn't tanked and I won't be paying a load of import duty too.

Anyone got a decent crystal ball?

[Truckosaurus]

If you said you were going to buy in April I'd say you were better off buying now, but hopefully the dust will have settled by August.

(Even if we leave on a No-Deal, some 'arrangement' will be done to ensure free trade, just don't call it 'a deal').

[anonymous-user]

If there is import duty won't there also be no vat?

[scrw.]

Only had experience from importing from the USA before, always got charged duty and VAT.

[anonymous-user]

scrw. said:

Only had experience from importing from the USA before, always got charged duty and VAT.

Shows what I know.
I didn't think they had VAT in the US.

I will get back in my box.

[scrw.]

But we have it here, and get charged it on imports.

[Mr Overheads]

If you've not been following GBP/EU exchange rate then google "gbpeu graph" then click the 1 year chart that Google brings up (defaults to 1 month).

GBP is relatively strong at the moment compared to the past year

[The Moose]

I would be buying and importing it before end of March. To avoid any duty/VAT that may become chargeable but also to avoid uncertainty in the potential supply, delays on the import etc.

[Countdown]

scrw. said:

But we have it here, and get charged it on imports.

Out of interest how do you pay it on imports? The invoice from the US supplier wont hav VAT on it.

[essayer]

Countdown said:

Out of interest how do you pay it on imports? The invoice from the US supplier wont hav VAT on it.

HMRC will charge you as part of the importation process. It’s charged on the item value plus shipping cost.

[scrw.]

HMRC calculate it on the import docs, sender declares the value and vat/duty is worked from that. However unsure of the process for valuing goods, so if the seller sends a complete engine say, and values it at £5, HMRC will ignore the declared value and stiff you for VAT on what they think it is worth. I have argued the value of something when they put an incorrect value on something, cannot remember how though, it was years ago.

[scrw.]

Mr Overheads said:

If you've not been following GBP/EU exchange rate then google "gbpeu graph" then click the 1 year chart that Google brings up (defaults to 1 month).

GBP is relatively strong at the moment compared to the past year

£ does seem in a good place compared to the last year, which way is it headed though......

[Mr Overheads]

scrw. said:

Mr Overheads said:

If you've not been following GBP/EU exchange rate then google "gbpeu graph" then click the 1 year chart that Google brings up (defaults to 1 month).

GBP is relatively strong at the moment compared to the past year

£ does seem in a good place compared to the last year, which way is it headed though......

Unfortunately no crystal ball. But you could buy a forward contract for August and lock in that rate now. Or even take a risk reduction strategy and lock in 50% now.

[Countdown]

scrw. said:

HMRC calculate it on the import docs, sender declares the value and vat/duty is worked from that. However unsure of the process for valuing goods, so if the seller sends a complete engine say, and values it at £5, HMRC will ignore the declared value and stiff you for VAT on what they think it is worth. I have argued the value of something when they put an incorrect value on something, cannot remember how though, it was years ago.

Ah ok, thanks.

We do something called a reverse VAT charge but we do it "in house" as it were so I'm possibly comparing apples and eggs.

[scrw.]

Mr Overheads said:

Unfortunately no crystal ball. But you could buy a forward contract for August and lock in that rate now. Or even take a risk reduction strategy and lock in 50% now.

Interesting, something I may investigate to spread the risk a bit. Will have to see what the UKk sales bod says, although buying from the EU I have to go through a UK sales chap who just sticks a percentage on and forces me to have it shipped (quite fancy a Austrian road trip to collect it, would be cheaper than their shipping!)