29 replies to this topic

[Benoit_Dupont]

Hi Guys,

 

not sure it's the right place, but since it is really a trader questions, I thought I would use this place to ask my question.

 

Starting january 2021; the Brexit transition period ends and with it comes some new restriction and rules we have to comply to.

 

I'm not here to discuss politics. Brexit was the result of an election and right or wrong, it will be executed. it's what it is. we don't have to like it or dislike it. 

 

Anyway, here is the thing:

I'm based in France and I operated until now with our friends from UK in a VAT-Franchise business model - as it was the rule in EU.

 

Now this has changed and apparently, although I'm based in France, I've to collect British-VAT for UK - which means unfortunately that my customers from UK will be charged VAT from our webshop.

 

on top of that, it appears that under a certain amount, I've to collect. but beyond that amount, the customer has to pay directly the VAT. Plus if I collect VAT, I still have no clue how to send it to UK...

 

but it gets a bit more complicated. Apparently, I've to register to HMRC as a french company but I'm not sure it is the case. I got some information saying that I must do it, but the official french guide does not mention it.

 

I've inquired at HMRC for some support as I want to do things right and needless to say, I got zero answers (but of course, probably same people as the french administration) 

 

So if some of you traders are in the same situation (EU company selling mini parts to UK), I would really love some help on this. 

 

If I can't find a solution, I'll have to temporarily shut down business operation for UK customers (some small companies have already done this here).

 

Anyway, if you have few hint on this, would be really cool. I would really love to do things right.

 

cheers hand have a lovely Christmas everyone. 

Edited by Benoit_Dupont, 23 December 2020 - 03:20 PM.

[nicklouse]

I think you have the wrong info. 
 

Before brexit you should have been charging VAT at the local rate of the buyer and then declaring that in your return to the french office. That is how I heard it should have been worked.

 

after brexit you will be  selling to the UK with no vat but the customer will be paying the VAT, import duties and a handling charge per delivery.

[Benoit_Dupont]

I think you have the wrong info. 
 

Before brexit you should have been charging VAT at the local rate of the buyer and then declaring that in your return to the french office. That is how I heard it should have been worked.

 

after brexit you will be  selling to the UK with no vat but the customer will be paying the VAT, import duties and a handling charge per delivery.

 

 

Actually no. I've a business regime that allows me to operate without VAT. the counter part is: I can't deduct any cost of my activity and nor deduct VAT from what I buy.  

 

and for larger companies, in EU for export, we do not charge VAT. VAT is paid by the customer to the relevant authorities of their respective countries.

 

from the latest information I've:

below £135, I've to collect VAT on behalf of UK so I invoice to UK citizens with VAT.

above £135, the customer receiving the goods will be charged VAT directly by UK authorities. thus above that threshold, we are supposed not to collect VAT anymore.

 

but some other info are in conflict. it's kind of a mess. 

[nicklouse]

When I was trading in the EU deliveries from the UK were without VAT. I then had to charge full vat to the retailer and pay that amount to the tax office. As I was fully register. If your are not registered to pay the Vat in France then you would in carry on as normal but the vat would be paid buy the buyer when they collect there goods. Just the same as when buying from the USA or other parts not in the EU. The seller in the USA does not collect the UK vat. Yes there are values that can not attract VAT and products that don’t. Samples and test equipment for example. I have not looked into it but if you have some links I can peruse.

[Benoit_Dupont]

Thx for the explanation. Here I have something called "micro-business" registration: it's fully registered but I don't collect nor deduct french VAT.

For UK, I always sent all custom forms just on case, as if I was shipping world wide as I would not want people to have problems on the receiving end.

[nicklouse]

Thx for the explanation. Here I have something called "micro-business" registration: it's fully registered but I don't collect nor deduct french VAT.

For UK, I always sent all custom forms just on case, as if I was shipping world wide as I would not want people to have problems on the receiving end.

Benoit, just seen this looks like you were right, but it does seem like the UK is trying to play by 2 sets of rules.

 

what I find interesting is how are you meant to provide the UK with the VAT part? 
 

and let’s say the vat you receive is £20 and goes into your account and that turns into Euros at a cost to you. You then want to pay the uk £20 but that is going to cost you again......

 

it seems they are wanting an un level playing field.

 

I would be very interested in what you find out.

 

nick.

 

opps forgot the link.

https://www.superdel...-uk-and-the-eu/

Edited by nicklouse, 01 January 2021 - 12:21 AM.

[r.tec]

https://ec.europa.eu...on-agreement_en

It's only about 1200 pages and so should be possible to learn by heart in a weekend!

[nicklouse]

Already heard of a bike company refusing to sell to the UK.

 

As they are being asked to register with HMRC and set up an account. 
 

the UK is the only country in the world that is asking for this.

 

crazy.

[Magneto]

It seems a shame that after 4 years they weren't able to get this all sorted out before the implementation date.  I've seen more than a few small parts sellers in the UK who have stopped selling to the EU. I'm in the states so as far as I know my parts purchases won't be affected, but I have noticed a lot of parts outages lately, I hope THAT gets sorted out soon too.

 

Good luck to all you guys on both sides of the channel

[Benoit_Dupont]

https://ec.europa.eu...on-agreement_en

It's only about 1200 pages and so should be possible to learn by heart in a weekend!

ahhaha

[Benoit_Dupont]

It seems a shame that after 4 years they weren't able to get this all sorted out before the implementation date.  I've seen more than a few small parts sellers in the UK who have stopped selling to the EU. I'm in the states so as far as I know my parts purchases won't be affected, but I have noticed a lot of parts outages lately, I hope THAT gets sorted out soon too.

 

Good luck to all you guys on both sides of the channel

thank you ! 

[Benoit_Dupont]

So, After spending quite some time during holidays following webinars on customs (It was great fun - no). turns out we can still operate using our current methods. however, all goods coming from EU will have a 2 to 4% Tariff applied by UK. (which I guess was the point all along, fair enough), on the type of goods we sell. (some others businesses are less fortunate with a +10% Tariff). and there will be VAT to be paid by the buyer to Her Majesty treasure service. we will not collect it, so it will be charged to the buyer.

[roberts]

Everyone is getting very confused by everything Brexit, mainly caused by the media and loads of adverts on the radio & telly here in the UK telling businesses to get ready for the change. I looked into it and there is no change, we have nothing that needs to be updated and/or changed here at Optimise.

 

All I had to do (I say "had to do", I was advised to do) was register for a "Economic Operator Registration and Identification" back in November, to allow us to export goods after Brexit, but it actually looks like the number won't be needed now (took about 5 mins anyway, so not exactly drastic).

 

It's pretty simple...

 

• The UK now only has UK VAT (at 20%) with itself, we no longer charge anyone outside of the UK VAT (the customer is now responsible for paying VAT in their own country).
• If you are based in the UK, you no longer pay VAT on anything you buy from the EU (just like if someone from the USA buys something from the EU).
• Importing and exporting good to and from the UK to anywhere in the world is now the same service, whereas before the EU was different to the rest of the World and you didn't require customs forms to export goods to the EU.

 

So if you are part of the EU:

 

• You need to fill in a customs form to send things to the UK (just like you did pre-Brexit if you were sending something to the USA for example).
• Anyone from the UK sending goods to the EU (or anywhere else in the World), will fill the customs form out for you (it's part of the delivery paperwork and you cannot book a delivery without the correct forms, I'm guessing this will be the same for EU based couriers as well - we can't be the only country that has automated customs forms built in to our booking processes with companies such as ParcelForce, FedEx and UPS).
• As with all goods from anywhere in the rest of the world (pre-Brexit/non-EU), there's a slim possibility that good arriving in your country (wherever you are) may be subject to a customs fee (or tariffs), this remains and the EU is now classed as (what we used to call) the rest of the World.

 

So to sum it up, treat the UK like you treat America or Switzerland, simple.

 

Whilst we are on the subject...

 

I was massively against Brexit (if it's not broken, don't fix it was my argument), but I have to say I was completely wrong. Brexit looks like it's going to be brilliant for us (the UK) and absolutely no different for anyone else. If you are in the EU, apart from filling in an extra form to send something to the UK it would appear that everything else is a bonus - especially considering you will likely save money on goods from the UK. Let's be honest here, customs don't check many things that come into a country and the likelihood is, you won't have to pay your countries VAT on a majority of things you import, saving you money on most things you import from the UK (that's certainly how it's worked here for years anyway, we seem to pay customs on around 1 in 10 parcels we import from non-EU countries).

Edited by roberts, 04 January 2021 - 12:21 PM.

[roberts]

It seems a shame that after 4 years they weren't able to get this all sorted out before the implementation date.  I've seen more than a few small parts sellers in the UK who have stopped selling to the EU. I'm in the states so as far as I know my parts purchases won't be affected, but I have noticed a lot of parts outages lately, I hope THAT gets sorted out soon too.

 

Good luck to all you guys on both sides of the channel

 

That's all COVID, not Brexit... several couriers (DPD and ParcelForce for example) have stopped/suspended services in the EU due to travel restrictions (I think ParcelForce have reopened with limited services but DPD is suspended until 11th January).

Edited by roberts, 04 January 2021 - 11:18 AM.

[nicklouse]

So, After spending quite some time during holidays following webinars on customs (It was great fun - no). turns out we can still operate using our current methods. however, all goods coming from EU will have a 2 to 4% Tariff applied by UK. (which I guess was the point all along, fair enough), on the type of goods we sell. (some others businesses are less fortunate with a +10% Tariff). and there will be VAT to be paid by the buyer to Her Majesty treasure service. we will not collect it, so it will be charged to the buyer.

The UK info is saying that up to 150 ish you need to charge and collect the VAT. If you would be charging it as normal. If you are not VAT registered I guess it would be business as normal but the UK customer might get hit with VAT. 

 

Don’t forget to fill the correct forms in.

 

also heard of a US company saying continuing trading with one of their customers in the UK was going to cost them about 1k.