VAT implications of buying from UK and/or continental EU

coolbeans

Thinking of buying a folder online, probably a Dahon on CRC. Will I be done for tax by customs or what's the deal? I'd appreciate your input.
CB/

bcmf

prob wont have to pay any as its from the EU.

blorg

If buying from the EU (including the UK) VAT will be included in the price you pay, there is no issue with customs (all EU countries are in a customs union.) Depending on the store you may pay UK VAT at 15% or Irish VAT at 21.5% (Wiggle are the only ones charging Irish VAT AFAIK although a lot more stores should be legally.)

Beasty

CRC definitely only apply the UK rate of 15% at present - this is due to go back up to 17.5% (or possibly higher) on January 1. The sterling exchange rate is pretty favourable at present also.

penexpers

coolbeans wrote: »

Thinking of buying a folder online, probably a Dahon on CRC. Will I be done for tax by customs or what's the deal? I'd appreciate your input.
CB/

Don't buy it from CRC - Dahon will refuse to honour the warranty.

Beasty

One further point - if the retailer is supposed to apply the Irish rate of 21.5%, but incorrectly applies the UK rate of 15%, it's their problem, not yours. They cannot recover the difference from you once they have sent you the bike (or any other equipment for that matter - the one product it make a really big difference on is helmets, which are zero-rated for VAT in the UK - Wiggle will charge you the Irish VAT, but other UK retailers typically do not)

peterako

blorg wrote: »

If buying from the EU (including the UK) VAT will be included in the price you pay, there is no issue with customs (all EU countries are in a customs union.) Depending on the store you may pay UK VAT at 15% or Irish VAT at 21.5% (Wiggle are the only ones charging Irish VAT AFAIK although a lot more stores should be legally.)

No.

EU Countries MUST apply their local VAT rate (when selling to a consumer).

So, Wiggle should be charging 15% NOT 21.5%.

It's one of the main reasons I have stopped buying from them I think it's a bit sneaky of them.

Think of it this way.....

When Wiggle Sell...they must apply VAT to their sales.

The VAT is a Tax that their govenment (UK) then receives.

If Wiggle apply a 21.5% VAT rate they still only have to pay 15% to the UK Government.

Nice little 6.5% mark-up for them

They have NO tax obligations to the Irish Govenment.

Blog is spot on with the rest.

Peter

penexpers

peterako wrote: »

No.

EU Countries MUST apply their local VAT rate (when selling to a consumer).

So, Wiggle should be charging 15% NOT 21.5%.

If you sell over a certain amount of goods per year to a country then you have to charge the rate of VAT in the country you are selling to.

http://ec.europa.eu/taxation_customs/taxation/vat/consumers/mail_order_distance/index_en.htm

The general rule is that it is the VAT rate of the supplier which applies ("origin" principle). However, if the level of sales in any one Member State exceed a certain threshold (either €35.000 or €100.000 depending on the Member State)or if the supplier opts, then he must register for VAT and charge VAT at the rate applicable in that Member State ("destination" principle).

peterako

penexpers wrote: »

If you sell over a certain amount of goods per year to a country then you have to charge the rate of VAT in the country you are selling to.

http://ec.europa.eu/taxation_customs/taxation/vat/consumers/mail_order_distance/index_en.htm

I stand corrected (and learn something new )

Lumen

penexpers wrote: »

Don't buy it from CRC - Dahon will refuse to honour the warranty.

Is that legal?

penexpers

Lumen wrote: »

Is that legal?

Perhaps. Dahon ship their bikes with a warranty card. To get the warranty activated, you need to have it assembled by a Dahon dealer and they will stamp the card. No stamp == no warranty. Also no stamp == no authorised assembly, so Dahon could potentially claim that it was poor assembly which caused any defects that might arise.

seamus

Lumen wrote: »

Is that legal?

Perfectly. A warranty is an additional guarantee provided by the manufacturer and isn't a replacement for the vendor's obligations. If there is a problem with the bike within a certain period of receiving, you are entitled to return it to the vendor. Once a good period of time has elapsed though, you're on your own.

Beasty

peterako wrote: »

No.

EU Countries MUST apply their local VAT rate (when selling to a consumer).

So, Wiggle should be charging 15% NOT 21.5%.

It's one of the main reasons I have stopped buying from them I think it's a bit sneaky of them.

Think of it this way.....

When Wiggle Sell...they must apply VAT to their sales.

The VAT is a Tax that their govenment (UK) then receives.

If Wiggle apply a 21.5% VAT rate they still only have to pay 15% to the UK Government.

Nice little 6.5% mark-up for them

They have NO tax obligations to the Irish Govenment.

Blog is spot on with the rest.

Peter

As penexers points out, this is not the correct technical position. Wiggle are registered for VAT in Ireland. I don't have one to hand, but their invoice should quote their Irish VAT registration number, and they will pay this VAT over to the Irish Government

Wiggle have almost certainly been subject to a specific VAT investigation, which has resulted in them to start applying the rules correctly (and paying any Irish VAT they have to charge over to the Irish Government). In due course I am sure this will happen to CRC also. However there will always be some smaller UK retailers that remain below the registration thresshold (assuming we don't give them too much free publicity on this site:)), which is currently around €35k sales to Ireland per year.

alfalad

Beasty wrote: »

Wiggle have almost certainly been subject to a specific VAT investigation, which has resulted in them to start applying the rules correctly (and paying any Irish VAT they have to charge over to the Irish Government). In due course I am sure this will happen to CRC also. However there will always be some smaller UK retailers that remain below the registration thresshold (assuming we don't give them too much free publicity on this site:)), which is currently around €35k sales to Ireland per year.

It's no wonder Wiggle are over the €35k limited, Blorg spends close to that a year on the site I reckon!