selling new car parts to the EU. Costs involved.

[mkjess12]

Hi,

We are a small business that have been making historic road and race car parts in the UK for approx 15 years and a good 40% of what we make goes over to the EU.

We make all of our products in house and do not buy from elsewhere.

The shipping is not an issue as we are experienced there, but it's fair to say that we are confused as to whether EU customers will have to pay VAT, Import Duties and handling charges etc,

The gov.uk website appears to contradict itself suggesting charges do apply and then later suggesting that they don't apply, and others such as the informative Royal Mail site state that these charges may apply.

The value of the parts can be anywhere between £30 and £5000.

Can anybody offer an accurate answer here please?

Thanks,
Andy

[mmm-five]

IANAE, but my understanding was to treat them the same way as you currently do for sales outside the EU.

So you sell ex-VAT, and the customer is liable for duties/taxes/admin charges once the parcel gets to the destination.

Unless you are registered for VAT in the countries your are selling into, then you would charge/pay the local VAT.

[mkjess12]

Thanks for the reply.

Sorry, I forgot to say that we are not VAT registered.

[mmm-five]

So what do you currently do for items you send outside of the EU - or is it currently UK/EU only?

If your non-EU customers pay the duty/taxes/admin fees on receipt, then your EU customers will have to do the same.

Edited by mmm-five on Thursday 21st January 10:07

[mkjess12]

Yes we do sell outside the EU and any duties etc are payable by the buyer. However with regards to the EU, some sites (including Gov.net) or parts thereof are suggesting that duties are payable, others suggesting they may be payable, and others suggesting they are not payable.

When we are dealing with customers, we need to know an accurate answer to this.

We have bought items from places such as the USA or Australia, and experience has taught us that it's unlikely that you would be able to work out accurately how much in duties etc you will be paying. A general rule of thumb is to add approx 40% to the cost of the item.

If the cost of our products are going to increase by a figure similar to 40% to customers in the EU, or anything approaching that, then that is going to have a major impact on our business and it's direction.

[Ean218]

I wouldn't get hung up about duty payable within the EU. If your parts are wholly manufactured in the UK they will have UK Country Of Origin so will not be liable to duty.

[mkjess12]

Thanks for the replies.

The fact that we had only two replies and they were each saying the opposite shows that things are not too clear.

Thanks Ean218. We will have a look at the UK Country of origin.

Andy

[mmm-five]

Ean218 said:

I wouldn't get hung up about duty payable within the EU. If your parts are wholly manufactured in the UK they will have UK Country Of Origin so will not be liable to duty.

But what about local VAT?

[mmm-five]

mkjess12 said:

Thanks for the replies.

The fact that we had only two replies and they were each saying the opposite shows that things are not too clear.

Thanks Ean218. We will have a look at the UK Country of origin.

Andy

I don't think they are opposite views at all.

I'm saying that the customer is now responsible for any duties/taxes/fees as per their own country's regulations.

Ean218 is only saying that the duty part is not worth worrying about (due to UK being CoO).

The duty is probably the smallest part of the costs the customer may have to pay...if the parcel is flagged by the local courier/postal service/customs of course.

The potential added VAT on UK products sold to EU countries will of course make products from VAT-unregistered companies look expensive to EU customers - but that's part of the issue of leaving the EU with a crap deal. If you were VAT-registered, then the difference would only really be between the different VAT rates in each country.