VAT on goods from Sweden

VAT on goods from Sweden

Author
Discussion

sunnybono

Original Poster:

84 posts

180 months

Wednesday 15th January 2020
quotequote all
Afternoon All,

Hopefully this is a relatively straight forward one for somebody that has done something similiar.

I am looking to buy approx £5000 worth of flooring from a supplier in Sweden who from what I can see charge 25% VAT. Am I likely as an individual, not business, likely to be hit for any VAT or duty in the UK, and is there a way of claiming back the 25% Swedish VAT and paying our "reduced" 20%?

Thanks

227bhp

10,203 posts

127 months

Wednesday 15th January 2020
quotequote all
I suspect there is some info missing here, but buying from Sweden is exactly the same as buying from within the UK, so unless you happen to be VAT reg then the same rules apply.

Eric Mc

121,779 posts

264 months

Wednesday 15th January 2020
quotequote all
On the assumption that you are a UK resident, non VAT registered individual, then the Swedish supplier MUST charge you whatever VAT is applicable to the goods they are selling to you. And since they are a Swedish trader, they will charge the appropriate Swedish rate of VAT.


IJWS15

1,830 posts

84 months

Wednesday 15th January 2020
quotequote all
I would expect you to

1 - pay VAT in Sweden and none in the UK assuming Sweden AND the UK are both in the single market.

2 - pay no VAT in Sweden and VAT/Import duty on entry to the UK if one or the other country is not in the single market.

Either way you will not pay VAT twice nor will you be able to avoid paying it once.

sunnybono

Original Poster:

84 posts

180 months

Wednesday 15th January 2020
quotequote all
Thanks. As I expected.

Was hoping there was a way of getting the 5% difference back but not an issue.

Simpo Two

85,148 posts

264 months

Wednesday 15th January 2020
quotequote all
3 - after 31 Jan, negotiate free trade deal with Sweden...

PF62

3,575 posts

172 months

Wednesday 15th January 2020
quotequote all
Eric Mc said:
On the assumption that you are a UK resident, non VAT registered individual, then the Swedish supplier MUST charge you whatever VAT is applicable to the goods they are selling to you. And since they are a Swedish trader, they will charge the appropriate Swedish rate of VAT.
Unless the Swedish trader has sold more than £70,000 of goods in the UK in a year, when they have to register for VAT in the UK and charge UK VAT.

www.gov.uk/guidance/vat-what-to-do-if-youre-an-ove...

Eric Mc

121,779 posts

264 months

Wednesday 15th January 2020
quotequote all
PF62 said:
Unless the Swedish trader has sold more than £70,000 of goods in the UK in a year, when they have to register for VAT in the UK and charge UK VAT.

www.gov.uk/guidance/vat-what-to-do-if-youre-an-ove...
Yes. But the OP didn't mention that he was dealing with such a situation. If that was the case, he wouldn't have mentioned a 25% VAT rate - which isn't a UK rate of VAT.

Canute

566 posts

67 months

Thursday 16th January 2020
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And just to help anyone dealing with this in the future, Swedish VAT is called MOMs at 25%

sgrimshaw

7,311 posts

249 months

Thursday 16th January 2020
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Do you have any friends in the building trade who are VAT registered?

If so there is a way for you to only pay 20% VAT, but to be honest it's a lot of fecking around for £250.

Being in the building trade is preferable, but any business which is VAT registered could do it in theory.


Canute

566 posts

67 months

Thursday 16th January 2020
quotequote all
sgrimshaw said:
Do you have any friends in the building trade who are VAT registered?

If so there is a way for you to only pay 20% VAT, but to be honest it's a lot of fecking around for £250.

Being in the building trade is preferable, but any business which is VAT registered could do it in theory.
The Swedish tax man is as close to a brutal dictator as it gets, finding anyone or company in Sweden to do "black money" type things will be near on impossible and as mentioned, probably not worth the £250

sgrimshaw

7,311 posts

249 months

Thursday 16th January 2020
quotequote all
Canute said:
The Swedish tax man is as close to a brutal dictator as it gets, finding anyone or company in Sweden to do "black money" type things will be near on impossible and as mentioned, probably not worth the £250
I am not suggesting anything of the sort.

The Swedish company would be making a legitimate sale to a UK VAT Registered business. Upon providing them with their UK VAT number, the Swedish company would zero rate the transaction as is allowed under EU VAT regulations.

The UK business would need to report the transaction as prescribed by

All in VAT Notice 725 and all totally legit.

https://www.gov.uk/guidance/vat-and-the-single-mar...

Once the goods are in the UK, then the OP would buy them from the "friend" and he would be charged 20% VAT in the normal way.



Eric Mc

121,779 posts

264 months

Thursday 16th January 2020
quotequote all
So, not a genuine business transaction but an artificial construct designed to reduce the end buyers VAT bill?

PF62

3,575 posts

172 months

Thursday 16th January 2020
quotequote all
Eric Mc said:
PF62 said:
Unless the Swedish trader has sold more than £70,000 of goods in the UK in a year, when they have to register for VAT in the UK and charge UK VAT.

www.gov.uk/guidance/vat-what-to-do-if-youre-an-ove...
Yes. But the OP didn't mention that he was dealing with such a situation. If that was the case, he wouldn't have mentioned a 25% VAT rate - which isn't a UK rate of VAT.
I was responding to your statement

Eric Mc said:
On the assumption that you are a UK resident, non VAT registered individual, then the Swedish supplier MUST charge you whatever VAT is applicable to the goods they are selling to you. And since they are a Swedish trader, they will charge the appropriate Swedish rate of VAT.
to point out for completeness that that a Swedish supplier does not always have to charge Swedish VAT to a non VAT registered individual, but there can quite easily be circumstances when the Swedish supplier has to charge UK VAT when supplying a non VAT registered individual, as you hadn't mentioned it.


anonymous-user

53 months

Sunday 19th January 2020
quotequote all
Eric, does the Swedish company have to register in the UK if they sell to a UK resident and the point of sale is in Sweden? I. E they sell ' to' the UK not 'in' the UK.

Eric Mc

121,779 posts

264 months

Sunday 19th January 2020
quotequote all
Berw said:
Eric, does the Swedish company have to register in the UK if they sell to a UK resident and the point of sale is in Sweden? I. E they sell ' to' the UK not 'in' the UK.
Only if they have sales in the UK over the UK VAT registration threshold and the sales are to UK VAT registered traders.

The basic rule is that a VAT registered trader in an EU country is selling to a customer in another EU country, if the customer is VAT registered in their home country, the seller can Zero Rate the sale.

If the customer is NOT VAT registered in their home country, then the appropriate VAT rate used in the seller's home country must be applied to the transaction.

anonymous-user

53 months

Sunday 19th January 2020
quotequote all
Eric, thanks that makes sense, I couldn't see why a retailer dealing with UK would bother to register for 70 k. Business to business transaction I understand.

Eric Mc

121,779 posts

264 months

Sunday 19th January 2020
quotequote all
£85,000 these days.

PF62

3,575 posts

172 months

Sunday 19th January 2020
quotequote all
Eric Mc said:
Berw said:
Eric, does the Swedish company have to register in the UK if they sell to a UK resident and the point of sale is in Sweden? I. E they sell ' to' the UK not 'in' the UK.
Only if they have sales in the UK over the UK VAT registration threshold and the sales are to UK VAT registered traders.
Eric Mc said:
£85,000 these days.
For distance sales into the UK, e.g. Swedish company selling to a UK non-VAT registered individual, the limit is the distance sales limit of £70k and not the VAT registration threshold.

Eric Mc

121,779 posts

264 months

Sunday 19th January 2020
quotequote all
Thanks for the clarification. I wonder how all this nitty gritty VAT legislation will pan out after Brexit.