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The New UK Vat Laws For Imported Goods / Potential Headache

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Posted 12/01/2020   08:53 am  Show Profile Bookmark this topic Add Phillystamper to your friends list Get a Link to this Message
If I am understanding this correctly, Starting on Jan 1st Vat collection becomes the responsibility of the business selling the item being sent into the UK. While it might not be that much of a headache for eBay sellers other than changing all of your listings to show the rate, eBay will collect and remit the tax, those with standalone ecommerce stores will have a big increase in hassles. Again, if I am reading this correctly. The cost for the store software changes to collect and remit the tax might make it untenable for smaller mom and pop businesses to continue to ship to the UK.
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Posted 12/01/2020   09:46 am  Show Profile Bookmark this reply Add GeoffHa to your friends list  Get a Link to this Reply
I haven't plumbed the depths of the horrors of Brexit taxes, but are you sure this won't simply be the same as the sales taxes imposed when UK sellers send things to the US, i.e. eBay adds the tax to the total and remits it. The seller never actually sees the money and has no involvement in the process.

Edit: sorry, just realised you'd divorced eBay sellers from the rest! I wonder how many micro-businesses actually send things abroad outside the eBay etc systems these days?
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Edited by GeoffHa - 12/01/2020 09:49 am
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Posted 12/01/2020   10:25 am  Show Profile Bookmark this reply Add Phillystamper to your friends list  Get a Link to this Reply
"Edit: sorry, just realised you'd divorced eBay sellers from the rest! I wonder how many micro-businesses actually send things abroad outside the eBay etc systems these days?"

I do in another collectibles area. Have been since the dawn of the internet. I do just a small amount of sales to the UK 2 thousand per yr or so with the occasional much larger sale. I may have to hire a developer to make changes to my checkout process which ain't cheap. I can image a small dealer that has sales of Albums and larger lots may run into a similar problem.
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Posted 12/01/2020   10:32 am  Show Profile Check revenuecollector's eBay Listings Bookmark this reply Add revenuecollector to your friends list  Get a Link to this Reply
Is there a sales threshold to the UK that must be met in order to have to comply with VAT collection and remittance, as there is with (most) state sales tax in the U.S.?

If not, I see many small and medium-sized online businesses simply no longer selling to residents of the UK.
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Posted 12/01/2020   10:33 am  Show Profile Bookmark this reply Add Phillystamper to your friends list  Get a Link to this Reply
So all morning I've been searching for info on this online. I finally found buried in the UK Gov. Revenue site a single mention of a threshold which exempts small business selling less than 70K into the UK per year. How they will track that btw? Getting to this info has taken a while. It's a relief to have found this little tidbit. Now to figure out what to add to all my eBay listings to make them compliant...
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Posted 12/01/2020   10:35 am  Show Profile Check revenuecollector's eBay Listings Bookmark this reply Add revenuecollector to your friends list  Get a Link to this Reply

Quote:
While it might not be that much of a headache for eBay sellers other than changing all of your listings to show the rate, eBay will collect and remit the tax...


If eBay is calculating, collecting, and remitting sales tax, why would the seller have to change anything in their listings? Personally I think it is a mistake to have anything in your listing at all about state or international taxes or customs duties, that then has to be updated or revised across potentially thousands of listings.

Let the platform handle all communication with the buyer regarding taxes and fees potentially owed. If you cannot control it, why communicate about it?
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Edited by revenuecollector - 12/01/2020 10:36 am
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Posted 12/01/2020   10:36 am  Show Profile Bookmark this reply Add GeoffHa to your friends list  Get a Link to this Reply
Could you shift the goods onto eBay or another platform?

These are the arrangements

https://www.gov.uk/government/publi...-the-changes
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Posted 12/01/2020   10:38 am  Show Profile Check revenuecollector's eBay Listings Bookmark this reply Add revenuecollector to your friends list  Get a Link to this Reply

Quote:
Now to figure out what to add to all my eBay listings to make them compliant...


I repeat: as a U.S. seller why are you putting anything at all in your listings about international VAT taxes? There's no compliance issue here. It's eBay's responsibility.
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Edited by revenuecollector - 12/01/2020 10:39 am
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Posted 12/01/2020   10:57 am  Show Profile Check docgfd's eBay Listings Bookmark this reply Add docgfd to your friends list  Get a Link to this Reply
Its the UK on January 1st....then the entire EU on March 1st...
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Posted 12/01/2020   11:20 am  Show Profile Check revenuecollector's eBay Listings Bookmark this reply Add revenuecollector to your friends list  Get a Link to this Reply
I am not finding any reference to a minimum sales threshold to have to register, collect, and remit VAT for businesses located outside the UK. In fact, they specifically state the opposite. From the link above:


Quote:
You will also need to register if you sell goods directly (without using an OMP to facilitate your sales) to UK consumers and the goods are outside the UK at the point of sale. From 1 January 2021 the distance selling threshold for sales from EU member states will no longer apply. There is no VAT registration threshold for businesses established outside the UK so you will be required to register for VAT on any value of sales where you become liable for VAT under these new measures.


If you're not operating through an OMP that is already collecting and remitting VAT on your behalf, i.e., you are selling through your own website, it appears that you are obligated to register for, collect, and remit VAT for all sales to the UK from day 1.

Can anyone corroborate?

I foresee a lot of independent websites shutting off sales to the UK, and ostensibly the EU due to the administrative burden.
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Posted 12/01/2020   11:21 am  Show Profile Bookmark this reply Add Phillystamper to your friends list  Get a Link to this Reply
From the email eBay sent out this morning.
"- Sellers should begin listing the applicable VAT rates on all their existing and new listings as soon as possible."
I agree, adding this info is not good, why should I a noncitizen have any part in the collection of your taxes? and why should I have to provide info on the rates? Which no doubt will change periodically. Customers already blame vendors when they get a big VAT bill as if it's our fault they had to pay it. I had a customer just this week tell me they would no longer buy from me b/c they had a big customs/vat bill.
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Posted 12/01/2020   11:23 am  Show Profile Check revenuecollector's eBay Listings Bookmark this reply Add revenuecollector to your friends list  Get a Link to this Reply
I received no such email. Was this through managed payments?
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Posted 12/01/2020   11:58 am  Show Profile Bookmark this reply Add Phillystamper to your friends list  Get a Link to this Reply
Yes, it might have been through Managed Payments. Re the threshold of 70K. This is from the UK gov website:
"Threshold for distance selling
The distance selling threshold is 70,000. If the annual value of your distance sales into the UK and the Isle of Man is less than the distance selling threshold, you charge VAT at the rate that applies in your own country. You will also account for the VAT in your own country.

If the value of your distance sales goes over the limit then you have to register for UK VAT. You then charge VAT on your VAT taxable sales at the UK rate instead of using your own country's rate and account for it in the UK.

You can apply to register for UK VAT as a distance seller voluntarily, even if you do not exceed the threshold."

There is also this exemption which is not mentioned anywhere else that I've found info online.

"Sales to the UK from outside the EU
If you are outside the EU and you sell goods to customers in the UK then this is not classed as distance selling for VAT purposes. The Channel Islands are not part of the EU.

Your customers should be aware that they may have to pay UK import VAT on the goods when they arrive in the UK. They may also have to pay duty."

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Posted 12/01/2020   11:59 am  Show Profile Bookmark this reply Add Petert4522 to your friends list  Get a Link to this Reply
I suppose we need another teaparty in Boston?


Peter
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Posted 12/01/2020   12:01 pm  Show Profile Bookmark this reply Add GeoffHa to your friends list  Get a Link to this Reply
If you applied eBay's advice, you would be listing every trading bloc or country in the world. A more sensible addition, if you sell abroad, might be to add a rider about the possibility of applicable taxes applied by the purchaser's country. But I don't, for example, include text about US taxes just in case someone from Florida buys an eBay item from me.
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Posted 12/01/2020   12:26 pm  Show Profile Check 51studebaker's eBay Listings Bookmark this reply Add 51studebaker to your friends list  Get a Link to this Reply
Is it ' eBay's advice' or is this the taxes/tariffs for each country? In my opinion the politicians were pretty slow in catching on to taxing online sales, many of us enjoyed transactions without the tax man grabbing his 'share'. I think those days are over.
Don
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