VAT changes post Brexit

No, that's not really helped Michael - I already knew that I'm not a sole trader - just someone selling off the odd bit of personal junk (oops sorry - cross that out) I meant to say - my family heirlooms

But the statement posted from eBay seems to suggest that VAT will be added to any sale from "within the UK where the seller is not VAT-registered" (which I am obviously not). I'm probably being a bit dense - but that would seem to add 20% to anything I might want to sell?

Regards,

IanT

Edited By IanT on 05/01/2021 17:17:07

It’s very simple to do your own ‘dip check’ Ian ... Just look at a few listed items

If ebay is intending to add VAT then that fact will be declared

MichaelG.

Edited By Michael Gilligan on 05/01/2021 17:27:52

OK - good idea!

IanT

I'm not sure whether this will add anything to the discussion or muddy the waters further, but here goes......

Yesterday morning, I ordered a 500W spindle motor with ER11 chuck, mounting and pot-controlled power unit from a seller in China via ebay. It cost £59.84, after the application of a "special" discount offer. The message from ebay, confirming my order,received just after I placed the order, stated that... "20% VAT will apply". Checked my PayPal account and £59.84 had duly been paid to the seller. The item has been dispatched today and it remains to be seen when or if the VAT will be collected and by whom. Delivery is expected in about a week to 10 days, so I'll update this posting when it arrives.

I don't know what I'm going to do with it when it does get here, just thought it might make a tool post mounted spindle to replace my home-brewed one, which is less than satisfactory.

John

Edited By John Hinkley on 08/01/2021 09:29:45

Edited By John Hinkley on 08/01/2021 09:30:40

I contacted my MP, Greg Hands (Con. Hammersmith & Fulham) pointing out that some European companies were refusing to sell to the UK as they regarded the new HMRC VAT requirements too onerous for the revenue involved. I further pointed-out that there was no apparent way for small and artisanal producers to undertake a simplified procedure.

Mr Hand's admin' support appear to be unaware of this 'hitch' and my observations have been forwarded to Jesse Norman (MP, Hereford & South Herefordshire), Financial Secretary to the Treasury for his consideration.

Regards,

Phil

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Have a look at the ebay receipt, John

... Mine clearly showed VAT

MichaelG.

[photo to follow, when I have redacted personal details]

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Edited By Michael Gilligan on 08/01/2021 10:47:34

Good experiment, but I think it will have to be repeated later in the year.

At the moment the tax changes are in transition. No-one - whether customer, supplier or HRMC - has had time to understand and make all the necessary changes. Ebay need to change their computer system and/or foreign suppliers have to register for VAT, find out how to pay UK tax and HRMC have to organise to receive the money and check payments against goods received.

As sorting out the details will take time and early transactions are likely to be riddled with errors, the government has decided to relax checking at this stage. The new rules don't apply in full yet.

I think John's purchase shows the new system starting up, but not operating as intended yet:

• ebay have told the customer VAT applies, but haven't collected it (as far as I can see). This warns the customer that tax is due and collection might be enforced.
• It's possible that the Chinese supplier is up and running VAT-wise, and the tax will be paid by them. Unlikely!
• The UK system for collecting unpaid VAT on postal imports is operational, so John might be asked to pay VAT plus handling charges on delivery. I say might because this system has always been applied haphazardly in the past, and it may have been temporarily relaxed.

As the world gradually adapts to the new system we can expect the rules to be enforced step by step. I predict John won't be charged VAT on delivery this time, but buying the same in June, or next year will be expensive because the purpose of the new system is to discourage tax dodging.

Since VAT is a tax on the customer, we can expect many items to cost more in future, whoever collects it. But it's only what we should have been paying in the past. Same tax obligation, it's just that the system has been changed to tighten the net. (In theory grey imports are discouraged and more tax raised. How well it works in practice remains to be seen! I think it's quite clever. )

I've no idea how long a major change like this will take to settle - could be years. In the meantime expect to see posts from people reporting 'no-problem' whilst others have to pay extra. Don't be baffled - there's an element of risk. A package might fly through the system without being checked as most do, or it could be one of those randomly inspected.

Although it's not been mentioned, a fairly obvious improvement once tax collection has been moved abroad is for senders to add a unique HMRC tax-paid code to the label, for scanning by postie in the UK. Then VAT collection in the UK becomes simple - no tax-paid code on a foreign package means it should be inspected.

Dave

Dave,

Please see my post, immediately above yours

MichaelG.

I’ve posted something similar before but this seems quite straightforward?

**LINK**

Actually looking on eBay it does say that VAT in included in the listed price. I don’t see why sellers would need to register for VAT if eBay are collecting it.

Ha, that wasn't there when I typed my post! Looks like the new system in action and ebay are collecting on behalf of the customer so the foreign supplier doesn't have to register. I wonder if Banggood and the others are equally up to speed?

Dave

Touché, Michael. Never seen one of those and I can't find anything like it for my transaction. Nearest thing is this:

Where should I look for the ebay receipt, please?

John

Edited By John Hinkley on 08/01/2021 15:59:49

I did look into this further the other day and was reassured - at least from the point of view of someone below the VAT threshold selling within the UK . This covers it....from eBay's UK site

"In practice, the following three situations will normally trigger mandatory VAT registration:

1. If you are an EU established seller and your business is trading over the legal thresholds defined by your home country you must ensure that you are registered for VAT. The thresholds vary between EU countries and are currently anything from 0 EUR in Spain to 85,000 GBP in UK. In practice, this means that you must register for VAT immediately if you are a Spanish business (no minimum threshold), whereas you are required to register for VAT as an UK seller only after you have made over 85,000 GBP sales within 12 consecutive months.
2. If you are selling goods that are warehoused/pre-deployed in any other country than your home country, then you must register for VAT immediately in the EU country where your goods are located. There is no minimal threshold and this rule also applies for sellers from outside of the EU with inventory pre-deployed in the EU.
3. If you sell a lot of goods located in one EU country to private buyers in another EU country (distance selling), you may also be required to register for and collect VAT in the country of your buyer if you exceed specific thresholds for that country. These range from 26,135 EUR for distance sales to Romania to 100,000 EUR for Germany. Note that in July 2021, the EU distance selling rules will align and businesses selling more than EUR 10,000 EUR cross border will need to collect VAT based on the delivery country. "

As Dave says - we are likely going to be paying VAT on those 'grey' imports in future - and UK VAT registered companies will have to give their VAT registration number to eBay - whereas private sellers will not - and this is what will drive any VAT charges. Seems that it's just coming here 6 months before the EU does it in July.

Regards,

IanT

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Here you go, John

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Ref. my post of 04-Jan-2021

MichaelG.

Edited By Michael Gilligan on 08/01/2021 16:26:07

Thanks, Michael. I managed to navigate there and found this:

Unless there is some sort of delay in the process, I read this as no VAT to pay. Or maybe postie will demand payment on delivery?

The plot thickens ........

John

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My purchase will be arriving by mail, and ebay collects the VAT separately

John’s purchase will be arriving via SpeedPAK, and ebay collects the VAT within that service

**LINK** : https://parcelsapp.com/en/carriers/speedpak

... All makes sense [for HMRC at least]

MichaelG.

I did just delete my post as I thought I had it wrong as the price for the same item listing number from same seller that included the VAT was £75.59 not the price on John's listing maybe they have recently updated the listing and uppe dtheir price to include VAt and a bit more to boot?

Mmmm ... interesting

John should be able to look at the previous listing “item you bought”

Definitely worth keeping a copy IF it shows VAT incuded

MichaelG.

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Just checked the current listing, and the Make an Offer box:

Edited By Michael Gilligan on 08/01/2021 20:29:06

I suspect you might have bagged a bargain, John

... Just had a look at the sold item on that date

MichaelG.

have you looked at the revisions Michael, none since end of December

This is starting to get out of hand! Just followed Jason's route to blue "see details" and it does, indeed, say VAT included. (The discount was a special offer received after I viewed the item a couple of times and put it in my watch list, while I dithered about the purchase. I ignored the offer for two days, then took the plunge.) This was the original advert:

I've taken up too much space on this thread already so will stop posting here now until it arrives and/or I'm charged VAT.

John