Buying from EU B2B VAT
Discussion
This is the first time I've bought hardware from the EU since Brexit. In the past I've told the supplier my GB VAT no. and they've not charged the VAT at the point of invoice. Now I'm wondering if I'm better to pay the VAT to the EU supplier (by not giving my VAT no to the supplier) and reclaim it later on my UK VAT return? I'd rather not make it get held up in customs/by the courier if they start asking for UK VAT (and import duty). Is that a possibility if it comes in with zero vat already paid? Or is stuff still moving freely between EU and UK anyway?
mjb1 said:
It threw me because when I go into the checkout process with my VAT no included, the merchant charges me zero vat, but it states that VAT and customs duties will be charged by the carrier.
Sounds like the EU supplier hasn't correctly updated their sales portal to deal with the UK leaving the EU.Having a UK VAT number should be irrelevant to them as it is simply an export of goods from the EU, no matter if you are an individual or a business, so a correctly set up sales portal shouldn't offer the opportunity for you to put in a VAT number once you have identified yourself as being outside the EU.
PF62 said:
Sounds like the EU supplier hasn't correctly updated their sales portal to deal with the UK leaving the EU.
Having a UK VAT number should be irrelevant to them as it is simply an export of goods from the EU, no matter if you are an individual or a business, so a correctly set up sales portal shouldn't offer the opportunity for you to put in a VAT number once you have identified yourself as being outside the EU.
But surely there must be a way to purchase from abroad without paying the foreign sales tax, or being able to reclaim it?Having a UK VAT number should be irrelevant to them as it is simply an export of goods from the EU, no matter if you are an individual or a business, so a correctly set up sales portal shouldn't offer the opportunity for you to put in a VAT number once you have identified yourself as being outside the EU.
mjb1 said:
It threw me because when I go into the checkout process with my VAT no included, the merchant charges me zero vat, but it states that VAT and customs duties will be charged by the carrier.
I don't think it's down to Brexit, but the VAT rules have changed this year. We now have to pay VAT up front on stuff we import (going the other way - from the UK to Belgium). The only difference is the point at which we pay the VAT - in the past we would have included it on the next VAT return and paid/reclaimed depending on the balance.Over here it's possible to register to defer the VAT payments, but as our purchases aren't so frequent, and rated at 6%, we haven't bothered. Fortunately, our products don't attract customs duties.
ETA: In our case, the customs agent arranges the VAT payment - we pay the agent, but this goes straight through to the VAT office. Maybe the carrier is offering you this service. So long as it's UK VAT you're paying, this is now normal.
Edited by sunbeam alpine on Monday 29th March 19:03
mjb1 said:
PF62 said:
Sounds like the EU supplier hasn't correctly updated their sales portal to deal with the UK leaving the EU.
Having a UK VAT number should be irrelevant to them as it is simply an export of goods from the EU, no matter if you are an individual or a business, so a correctly set up sales portal shouldn't offer the opportunity for you to put in a VAT number once you have identified yourself as being outside the EU.
But surely there must be a way to purchase from abroad without paying the foreign sales tax, or being able to reclaim it?Having a UK VAT number should be irrelevant to them as it is simply an export of goods from the EU, no matter if you are an individual or a business, so a correctly set up sales portal shouldn't offer the opportunity for you to put in a VAT number once you have identified yourself as being outside the EU.
Now the transition period has ended a sale to the UK is just an export for suppliers in the EU not the intra-community sales they were before.
As for reclaiming, if you pay the VAT to the courier you can reclaim it, but obviously not the courier’s handling fee or any customs duty.
If you pay U.K. VAT when buying goods or services from a U.K. VAT registered supplier, and you are a U.K. VAT registered entity, you should be able to reclaim that VAT.
If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
Eric Mc said:
If you pay U.K. VAT when buying goods or services from a U.K. VAT registered supplier, and you are a U.K. VAT registered entity, you should be able to reclaim that VAT.
If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
But if the foreign seller, sells it as an export (heading to the UK) without charging his native VAT at the time of sale, then at the point of import, the shipping company will invoice me for UK vat (and customs duty?), which I'd have to pay to them but is reclaimable as UK VAT?If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
The thing that's slightly odd is that their native VAT rate (Czech Republic) is 21%, but their website is saying it'll charge me VAT at 20%. Maybe that is because their website hasn't been properly updated to handle the Brexit effect?
Is customs duty the same as third country duty? The hardware is manufactured in China, sent via the EU, trade-tariff.service.gov.uk says that should be 0%.
mjb1 said:
Eric Mc said:
If you pay U.K. VAT when buying goods or services from a U.K. VAT registered supplier, and you are a U.K. VAT registered entity, you should be able to reclaim that VAT.
If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
But if the foreign seller, sells it as an export (heading to the UK) without charging his native VAT at the time of sale, then at the point of import, the shipping company will invoice me for UK vat (and customs duty?), which I'd have to pay to them but is reclaimable as UK VAT? If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
mjb1 said:
The thing that's slightly odd is that their native VAT rate (Czech Republic) is 21%, but their website is saying it'll charge me VAT at 20%. Maybe that is because their website hasn't been properly updated to handle the Brexit effect?
How much does the item cost? If it is less than £135 then the overseas supplier must register for VAT in the UK and charge UK VAT so there is no VAT paid on import (or customs duty).
If the total order is over £135 then they do not charge UK VAT (even if they are VAT registered in the UK) but you pay it on import to the courier.
mjb1 said:
Is customs duty the same as third country duty? The hardware is manufactured in China, sent via the EU, trade-tariff.service.gov.uk says that should be 0%.
Yes, because the EU is now a ‘third country’. Whether you get charged any duty or not will depend on the rules of origin, and more importantly what the seller puts on the customs paperwork.PF62 said:
mjb1 said:
Eric Mc said:
If you pay U.K. VAT when buying goods or services from a U.K. VAT registered supplier, and you are a U.K. VAT registered entity, you should be able to reclaim that VAT.
If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
But if the foreign seller, sells it as an export (heading to the UK) without charging his native VAT at the time of sale, then at the point of import, the shipping company will invoice me for UK vat (and customs duty?), which I'd have to pay to them but is reclaimable as UK VAT? If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
mjb1 said:
The thing that's slightly odd is that their native VAT rate (Czech Republic) is 21%, but their website is saying it'll charge me VAT at 20%. Maybe that is because their website hasn't been properly updated to handle the Brexit effect?
How much does the item cost? If it is less than £135 then the overseas supplier must register for VAT in the UK and charge UK VAT so there is no VAT paid on import (or customs duty).
If the total order is over £135 then they do not charge UK VAT (even if they are VAT registered in the UK) but you pay it on import to the courier.
mjb1 said:
Is customs duty the same as third country duty? The hardware is manufactured in China, sent via the EU, trade-tariff.service.gov.uk says that should be 0%.
Yes, because the EU is now a ‘third country’. Whether you get charged any duty or not will depend on the rules of origin, and more importantly what the seller puts on the customs paperwork.He cannot UNLESS he decides to register his business for VAT in that foreign country.
Eric Mc said:
PF62 said:
mjb1 said:
Eric Mc said:
If you pay U.K. VAT when buying goods or services from a U.K. VAT registered supplier, and you are a U.K. VAT registered entity, you should be able to reclaim that VAT.
If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
But if the foreign seller, sells it as an export (heading to the UK) without charging his native VAT at the time of sale, then at the point of import, the shipping company will invoice me for UK vat (and customs duty?), which I'd have to pay to them but is reclaimable as UK VAT? If you are charged foreign VAT from a foreign supplier, you cannot reclaim that VAT UNLESS you register your business for VAT in that foreign country.
mjb1 said:
The thing that's slightly odd is that their native VAT rate (Czech Republic) is 21%, but their website is saying it'll charge me VAT at 20%. Maybe that is because their website hasn't been properly updated to handle the Brexit effect?
How much does the item cost? If it is less than £135 then the overseas supplier must register for VAT in the UK and charge UK VAT so there is no VAT paid on import (or customs duty).
If the total order is over £135 then they do not charge UK VAT (even if they are VAT registered in the UK) but you pay it on import to the courier.
mjb1 said:
Is customs duty the same as third country duty? The hardware is manufactured in China, sent via the EU, trade-tariff.service.gov.uk says that should be 0%.
Yes, because the EU is now a ‘third country’. Whether you get charged any duty or not will depend on the rules of origin, and more importantly what the seller puts on the customs paperwork.He cannot UNLESS he decides to register his business for VAT in that foreign country.
Of course even if the order is for less than £135 the foreign supplier might have no idea what they are doing and either try to charge foreign VAT which they cannot recover or may not charge VAT at all so there is no VAT to recover.
You are missing my point. A UK VAT registered entity can only reclaim UK Input VAT. Yes, if the foreign supplier is charging UK VAT, then the OP can recover it.
If the foreign supplier is charging their normal "foreign" VAT, that cannot be recovered UNLESS the OP registers for VAT in that foreign country.
If the foreign supplier is charging their normal "foreign" VAT, that cannot be recovered UNLESS the OP registers for VAT in that foreign country.
It's about £3000 worth of enterprise IT hardware, way over £135. They aren't just some tin pot EU based retailer, they are the main European manufacturer's warehouse/distributor. I suspect they supply the UK distributors wholesale from there too. When emailed them I ask about shipping to the UK, they just replied stating that 'you pay VAT directly at our store', which was a bit cryptic (but they didn't know I'm vat registered or even that it's b2b purchase).
Just looked at the invoice from last time I bought from them (Nov 2020). No vat/sales tax was charged, it stated Vat exempt supply according to Art 138 of Vat directive 2006/112/EC. Is it still possible to supply on this basis post Brexit? The invoice also has the supplier's GB and CZ vat numbers quoted, so they are (or at least were) registered for UK VAT.
The fact their website checkout is stating VAT at 20% (when their native rate is 21%) also suggests they'll be charging me UK VAT. So on this basis it would seem I'm better to pay the (UK?) vat to the seller at purchase, rather than have the shipper handle collecting it (which will presumably hold up the process)?
I don't mind if/when I have to pay the VAT, as long as I can reclaim it.
Just looked at the invoice from last time I bought from them (Nov 2020). No vat/sales tax was charged, it stated Vat exempt supply according to Art 138 of Vat directive 2006/112/EC. Is it still possible to supply on this basis post Brexit? The invoice also has the supplier's GB and CZ vat numbers quoted, so they are (or at least were) registered for UK VAT.
The fact their website checkout is stating VAT at 20% (when their native rate is 21%) also suggests they'll be charging me UK VAT. So on this basis it would seem I'm better to pay the (UK?) vat to the seller at purchase, rather than have the shipper handle collecting it (which will presumably hold up the process)?
I don't mind if/when I have to pay the VAT, as long as I can reclaim it.
Here is what HMRC says should happen in your circumstances (from the HMRC website) -
Business to business sales to UK VAT-registered customers
The seller will not need to charge and account for VAT if the customer gives them their VAT registration number. The seller can confirm it’s correct using the online service.
The seller can add a note to the invoice (for example, by writing ‘reverse charge: customer to account for VAT to HMRC’) then send it to the UK business customer.
The business customer will then be responsible for accounting for any VAT due on their VAT Return, if the goods are supplied in:
Great Britain using a ‘reverse charge’ procedure
Northern Ireland, using Postponed VAT Accounting
In both cases, the seller will be able to recover the VAT as input tax on the same VAT Return under normal VAT recovery rules.
Sellers do not have to register for VAT if they only sell goods that are outside the UK at the point of sale to UK VAT-registered businesses.
So, that seems to me to indicate that the seller DOES NOT CHARGEyou VAT on the invoice.
YOU declare Output VAT on the value of the invoice on your next VAT return but at the same time, also reclaim it is Input VAT - so you don't end up paying any VAT on the transaction.
Business to business sales to UK VAT-registered customers
The seller will not need to charge and account for VAT if the customer gives them their VAT registration number. The seller can confirm it’s correct using the online service.
The seller can add a note to the invoice (for example, by writing ‘reverse charge: customer to account for VAT to HMRC’) then send it to the UK business customer.
The business customer will then be responsible for accounting for any VAT due on their VAT Return, if the goods are supplied in:
Great Britain using a ‘reverse charge’ procedure
Northern Ireland, using Postponed VAT Accounting
In both cases, the seller will be able to recover the VAT as input tax on the same VAT Return under normal VAT recovery rules.
Sellers do not have to register for VAT if they only sell goods that are outside the UK at the point of sale to UK VAT-registered businesses.
So, that seems to me to indicate that the seller DOES NOT CHARGEyou VAT on the invoice.
YOU declare Output VAT on the value of the invoice on your next VAT return but at the same time, also reclaim it is Input VAT - so you don't end up paying any VAT on the transaction.
Edited by Eric Mc on Tuesday 30th March 11:06
Eric Mc said:
Here is what HMRC says should happen in your circumstances (from the HMRC website) -
Business to business sales to UK VAT-registered customers
The seller will not need to charge and account for VAT if the customer gives them their VAT registration number. The seller can confirm it’s correct using the online service.
The seller can add a note to the invoice (for example, by writing ‘reverse charge: customer to account for VAT to HMRC’) then send it to the UK business customer.
The business customer will then be responsible for accounting for any VAT due on their VAT Return, if the goods are supplied in:
Great Britain using a ‘reverse charge’ procedure
Northern Ireland, using Postponed VAT Accounting
In both cases, the seller will be able to recover the VAT as input tax on the same VAT Return under normal VAT recovery rules.
Sellers do not have to register for VAT if they only sell goods that are outside the UK at the point of sale to UK VAT-registered businesses.
So, that seems to me to indicate that the seller DOES NOT CHARGEyou VAT on the invoice.
YOU declare Output VAT on the value of the invoice on your next VAT return but at the same time, also reclaim it is Input VAT - so you don't end up paying any VAT on the transaction.
Thanks Eric. I looked at that HMRC page, and it gave the impression that was just for consignments under £135. I don't think these goods fall under the 'reverse charge' procedure either (that just seems to be an anti fraud control for mobile phones, computer chips, and wholesale gas/electric).Business to business sales to UK VAT-registered customers
The seller will not need to charge and account for VAT if the customer gives them their VAT registration number. The seller can confirm it’s correct using the online service.
The seller can add a note to the invoice (for example, by writing ‘reverse charge: customer to account for VAT to HMRC’) then send it to the UK business customer.
The business customer will then be responsible for accounting for any VAT due on their VAT Return, if the goods are supplied in:
Great Britain using a ‘reverse charge’ procedure
Northern Ireland, using Postponed VAT Accounting
In both cases, the seller will be able to recover the VAT as input tax on the same VAT Return under normal VAT recovery rules.
Sellers do not have to register for VAT if they only sell goods that are outside the UK at the point of sale to UK VAT-registered businesses.
So, that seems to me to indicate that the seller DOES NOT CHARGEyou VAT on the invoice.
YOU declare Output VAT on the value of the invoice on your next VAT return but at the same time, also reclaim it is Input VAT - so you don't end up paying any VAT on the transaction.
Edited by Eric Mc on Tuesday 30th March 11:06
Further down the page:
Consignments valued at more than £135
Normal VAT and customs rules will apply on importation of the goods into Great Britain from outside the UK or into Northern Ireland from outside the UK and EU.
Seeing as the seller has a uk vat no, would it be safer to just pay them the vat and reclaim it as a normal input? I don't really want customs/shipper to hold it up whilst they collect the VAT, if that can be avoided.
From this site: https://smallbusiness.co.uk/how-brexit-is-going-to...
it sounds like I would need to register for an EORI number and have the seller put that on on the customs delcaration if I don't pay the VAT at the point of sale? Which would make it easier to pay the vat to the supplier and reclaim it as a normal input (assuming they haven't dropped their UK VAT registration post Brexit).
You will need an EORI number
If you already import from non-EU countries, you will already have an EORI number. EORI stands for Economic Operators Registration and Identification and is a European Union registration and identification number for businesses which undertake the import or export of goods into or out of the EU. If you do not have an EORI, you may have increased costs and delays.
You will have to pay VAT on goods imported from EU
Currently (pre-Brexit) when buying goods as a business from the EU the purchase from the supplier is “zero-rated”. The tax is handled by accounting for UK domestic VAT through your UK VAT return at the same rate as if you had purchased from a UK supplier and then recovering it through the same VAT return; there are no additional duties or import VAT on any purchases within the EU.
This will no longer be the case post Brexit January 1
For any goods above £135 you will likely have to pay Import VAT (20 per cent) when the goods arrive in the UK. Import VAT is usually payable on the import value of the goods, including any shipping costs and duties, so the total amount of VAT may be slightly higher than the equivalent domestic VAT.
HMRC will send a certificate (C79) for the Import VAT declared to the EORI-registered person whose VAT registration number is shown in box 8 of the import declaration. Without the C79 it is not possible to recover the Import VAT through your VAT return.
it sounds like I would need to register for an EORI number and have the seller put that on on the customs delcaration if I don't pay the VAT at the point of sale? Which would make it easier to pay the vat to the supplier and reclaim it as a normal input (assuming they haven't dropped their UK VAT registration post Brexit).
You will need an EORI number
If you already import from non-EU countries, you will already have an EORI number. EORI stands for Economic Operators Registration and Identification and is a European Union registration and identification number for businesses which undertake the import or export of goods into or out of the EU. If you do not have an EORI, you may have increased costs and delays.
You will have to pay VAT on goods imported from EU
Currently (pre-Brexit) when buying goods as a business from the EU the purchase from the supplier is “zero-rated”. The tax is handled by accounting for UK domestic VAT through your UK VAT return at the same rate as if you had purchased from a UK supplier and then recovering it through the same VAT return; there are no additional duties or import VAT on any purchases within the EU.
This will no longer be the case post Brexit January 1
For any goods above £135 you will likely have to pay Import VAT (20 per cent) when the goods arrive in the UK. Import VAT is usually payable on the import value of the goods, including any shipping costs and duties, so the total amount of VAT may be slightly higher than the equivalent domestic VAT.
HMRC will send a certificate (C79) for the Import VAT declared to the EORI-registered person whose VAT registration number is shown in box 8 of the import declaration. Without the C79 it is not possible to recover the Import VAT through your VAT return.
You will need an EORI number. Here in Belgium this is our existing VAT number prefixed by "BE0"
As I said in my earlier post, you either have to appy to defer the VAT payment, or you pay it up front.
In our case, as we buy full lorry loads, we pay the VAT to the transport company's customs agent , who forwards it to the state (hopefully!
). Our delivery is only released after this payment is received.
If it goes by carrier, I would imagine that the carrier offers this also as part of the service, so you would pay this to them. Either way, the VAT you have to pay is UK VAT.
As I said in my earlier post, you either have to appy to defer the VAT payment, or you pay it up front.
In our case, as we buy full lorry loads, we pay the VAT to the transport company's customs agent , who forwards it to the state (hopefully!
). Our delivery is only released after this payment is received.If it goes by carrier, I would imagine that the carrier offers this also as part of the service, so you would pay this to them. Either way, the VAT you have to pay is UK VAT.
sunbeam alpine said:
You will need an EORI number. Here in Belgium this is our existing VAT number prefixed by "BE0"
As I said in my earlier post, you either have to appy to defer the VAT payment, or you pay it up front.
In our case, as we buy full lorry loads, we pay the VAT to the transport company's customs agent , who forwards it to the state (hopefully! ). Our delivery is only released after this payment is received.
If it goes by carrier, I would imagine that the carrier offers this also as part of the service, so you would pay this to them. Either way, the VAT you have to pay is UK VAT.
I've just registered with HMRC and been issued an EORI number - just my VAT no with 000 on the end. EU seller has also just confirmed that they are still UK vat registered. So I'm thinking it'll be easier to just pay the VAT on purchase and then it should come straight through customs with no hold ups? They use UPS for shipping, so a reputable international carrier.As I said in my earlier post, you either have to appy to defer the VAT payment, or you pay it up front.
In our case, as we buy full lorry loads, we pay the VAT to the transport company's customs agent , who forwards it to the state (hopefully!
). Our delivery is only released after this payment is received.If it goes by carrier, I would imagine that the carrier offers this also as part of the service, so you would pay this to them. Either way, the VAT you have to pay is UK VAT.
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