VAT when importing goods into the UK

streetwood

Hi there, could really use someones help on this one:

We've been running our clothing business now for 2 years. We're getting our goods from China sent to Ireland so when they arrive we pay VAT and Duty on the goods. We can claim this VAT back.

Our customers are mostly UK based so our plan is this:

1) Send the goods directly to the UK.

2) Goods will go to a fulfillment agent.

3) The fulfillment agent will post the goods to our customers directly.

This will reduce postage cost and time.

My question is this: when the goods arrive in the UK are we going to be liable for VAT as we're an Irish based company? Obviously we pay duty which is a given wherever you send goods but I have no idea about the VAT implications. We pay it when they arrive in Dublin but I can't imagine we'd be liable in the UK as we're not a UK based company but I wouldn't be 100% sure.

Just want to clear this up, love to hear someones thoughts on it.

dbran

Hi

A UK Vat registration is required because you take delivery of the goods in the UK for onward supply to the UK customers.

Kind Regards


dbran

streetwood

So no avoiding it even though we're based in Ireland and the company is registered here?

Alan Shore

streetwood wrote: »

So no avoiding it even though we're based in Ireland and the company is registered here?

Someone will have to pay the UK VAT to get the goods out of the bonded warehouse. So it's either you or the customer.

streetwood

Okay thanks.

We are going to do the same thing in the USA. Do you know if the same VAT implications would apply?

Alan Shore

Not being smart but you should really direct these questions to your accountants. That's what you pay them for and they will be more familiar with your circumstances.

Are your clients registered for VAT in the foreign jurisdiction or not.

Do distance selling thresholds apply, is it in fact the customer who can pay the VAT and recover it thought their own VAT return.

You may also have an exposure to foreign CT which needs to be considered to ensure that it does not become an issue.

Mr. Incognito

You will be obliged to Register in the UK and pay UK vat.

No vat outside of Europe. If they enter Europe for export there are exemptions from VaT available.

Contact your accountant. An Internet forum is no substitute for professional advice and the Revenue won't accept the excuse, but the man on the internet told me it was fine.

Get your structures right at the start with professional advice

RUDOLF289

streetwood wrote: »

Hi there, could really use someones help on this one:

We've been running our clothing business now for 2 years. We're getting our goods from China sent to Ireland so when they arrive we pay VAT and Duty on the goods. We can claim this VAT back.

Our customers are mostly UK based so our plan is this:

1) Send the goods directly to the UK.

2) Goods will go to a fulfillment agent.

3) The fulfillment agent will post the goods to our customers directly.

This will reduce postage cost and time.

My question is this: when the goods arrive in the UK are we going to be liable for VAT as we're an Irish based company? Obviously we pay duty which is a given wherever you send goods but I have no idea about the VAT implications. We pay it when they arrive in Dublin but I can't imagine we'd be liable in the UK as we're not a UK based company but I wouldn't be 100% sure.

Just want to clear this up, love to hear someones thoughts on it.

Good morning Streetwood,

I am going against the grain here.

If you bring your goods into the UK via another EU port and have the goods cleared in that EU port in your name and on your VAT registration, the following will happen;

1) The goods are cleared by a fiscal representative (usually a customs broker) on arrival in the EU port
2) You pay the duty on import into the EU
3) The goods are delivered from the arrival port in the EU to your Fulfillment agent in the UK
4) The VAT liability for the goods is transferred to your VAT registration
5) You account for the goods in your VAT return as an Intra EU acquisition (because they have been cleared into the EU and duty has been paid, you now treat them from a VAT point of view as an Intra EU aquisition)
6) As with all VAT liabilities incurred in the course of your business, the VAT liability is a deductible input in your VAT return. Therefore in the same VAT return you accrue the liability and you claim the deductible. No outlay of VAT!

(by the way the above process can also be applied to your current imports from China - provided you import full container loads. You have to be the only importer in that container)

There are a couple of aspects to consider ;

A) If your UK clients are VAT registered businesses, you can invoice from Ireland and apply a zero rate of VAT
If your UK clients are private individuals they may be liable for Irish or UK VAT depending on your level of sales. (you probably need to have a look on the revenue website for the topic Distance sales; see the following links ;

http://www.revenue.ie/en/tax/vat/leaflets/distance-sales-eu.html
http://www.revenue.ie/en/tax/vat/guide/intra-community-supplies.html

Needless to say, you would need to utilise the services of an agent that understands the process and can arrange the transportation from China to the UK in order to utilise the above described process.

Hope tyhis assists

Cheers,
Rudolf289

Alan Shore

I think Irish Revenue have a different view on Goods arriving from China from an EU supplier.

VAT is payable by the Irish customer to get the goods out of the bonded warehouse!

atrick

streetwood wrote: »

Hi there, could really use someones help on this one:

We've been running our clothing business now for 2 years. We're getting our goods from China sent to Ireland so when they arrive we pay VAT and Duty on the goods. We can claim this VAT back.

Our customers are mostly UK based so our plan is this:

1) Send the goods directly to the UK.

2) Goods will go to a fulfillment agent.

3) The fulfillment agent will post the goods to our customers directly.

This will reduce postage cost and time.

My question is this: when the goods arrive in the UK are we going to be liable for VAT as we're an Irish based company? Obviously we pay duty which is a given wherever you send goods but I have no idea about the VAT implications. We pay it when they arrive in Dublin but I can't imagine we'd be liable in the UK as we're not a UK based company but I wouldn't be 100% sure.

Just want to clear this up, love to hear someones thoughts on it.

Dear Sir,

Judging by the varied replies to this issue I would strongly suggest you have a session with the VAT section of your local Revenue office. They will have all the answers and there will be no fee!

Kind regards,
Atrick

meathstevie

atrick wrote: »

Dear Sir,

Judging by the varied replies to this issue I would strongly suggest you have a session with the VAT section of your local Revenue office. They will have all the answers and there will be no fee!

Kind regards,
Atrick

Simplest and soundest advice yet. Ring the Revenue here and in the UK and they'll tell you exactly what you need to do without it costing you a penny except the price of a local call.

dbran

atrick wrote: »

Dear Sir,

Judging by the varied replies to this issue I would strongly suggest you have a session with the VAT section of your local Revenue office. They will have all the answers and there will be no fee!

Kind regards,
Atrick

It is not the job of the revenue commissioners to provide tax advice to the public especially on complex issues such as this. They just collect the VAT on behalf of the government, thats all.

You need to spend some money getting proper specific advice from a qualified professional.

Kind Regards


Dbran