So prices have gone down??

Whitecat

prowla said:

fretmeister said:

RobertW said:

So let me get this straight, because the 20 odd threads that have been hijacked to reiterate the exact same point ad nauseam haven't made it abundantly clear, do we have to pay additional VAT on imported instruments from the EU now? 

You’ll pay import and then vat on the item price AND on the shipping cost.

Just like from the USA.

That’s not what the Free Trade deal says. 

All the “free trade” deal means is that there are no tariffs. Duty and VAT are still very much applicable. 

prowla

exocet said:

prowla said:

fretmeister said:

RobertW said:

So let me get this straight, because the 20 odd threads that have been hijacked to reiterate the exact same point ad nauseam haven't made it abundantly clear, do we have to pay additional VAT on imported instruments from the EU now? 

You’ll pay import and then vat on the item price AND on the shipping cost.

Just like from the USA.

That’s not what the Free Trade deal says. 

Free Trade Deals don't address VAT 

Free Trade Deals are centred on products and produce that originate within a defined territory i.e Rules of Origin apply.

A guitar manufactured in EU with EU sourced parts & labour = Duty Free but VAT still applies to sale.

Guitars that originate elsewhere but are sold from EU to UK - depending on how things are structured - reseller in EU has already paid EU duty....unless a Freeport or similar exists?

Technically it should be possible to remove Duty in EU and then pay the official UK Duty rate for that product from the original country of origin. To me that sounds like a lot of additional grief - easier for manufacturer to work through distribution in UK i.e bypass EU?

Under the single market, VAT was only levied once - outside of Single Market- HMRC want their cut. 

Looks like there are some arrangements for overseas registering for UK VAT / collecting at point of sale. Equally there appears to be plenty of scenarios where buying 2nd hand from a private seller in EU will become 20% + more expensive. 

My guess is that UK consumer / small trader will buy and sell less with EU.

In short, buying / selling to and from EU is now the same as trading with the U S from a consumer perspective.

Manufactures will re-establish UK Distribution.

Guitars and Music gear are very simple......cars and machinery are not...

Correct you pay VAT; incorrect you pay import duty. 

exocet

prowla said:

exocet said:

prowla said:

fretmeister said:

RobertW said:

So let me get this straight, because the 20 odd threads that have been hijacked to reiterate the exact same point ad nauseam haven't made it abundantly clear, do we have to pay additional VAT on imported instruments from the EU now? 

You’ll pay import and then vat on the item price AND on the shipping cost.

Just like from the USA.

That’s not what the Free Trade deal says. 

Free Trade Deals don't address VAT 

Free Trade Deals are centred on products and produce that originate within a defined territory i.e Rules of Origin apply.

A guitar manufactured in EU with EU sourced parts & labour = Duty Free but VAT still applies to sale.

Guitars that originate elsewhere but are sold from EU to UK - depending on how things are structured - reseller in EU has already paid EU duty....unless a Freeport or similar exists?

Technically it should be possible to remove Duty in EU and then pay the official UK Duty rate for that product from the original country of origin. To me that sounds like a lot of additional grief - easier for manufacturer to work through distribution in UK i.e bypass EU?

Under the single market, VAT was only levied once - outside of Single Market- HMRC want their cut. 

Looks like there are some arrangements for overseas registering for UK VAT / collecting at point of sale. Equally there appears to be plenty of scenarios where buying 2nd hand from a private seller in EU will become 20% + more expensive. 

My guess is that UK consumer / small trader will buy and sell less with EU.

In short, buying / selling to and from EU is now the same as trading with the U S from a consumer perspective.

Manufactures will re-establish UK Distribution.

Guitars and Music gear are very simple......cars and machinery are not...

Correct you pay VAT; incorrect you pay import duty. 

I don't think that the Duty part is clear.

There are different scenarios e.g. New Goods sold through Retail v 2nd Hand via "eBay" v buying something physically and bringing it into the country in the boot of your car.

The various UK Gov Web links posted on here in various threads allude to scenarios where duty applies? 

If duty was not payable in UK, the UK Treasurey could loose out on £ millions in duty if the consumer opted to continue buying from EU? So to protect that, the default position will be tariffs levied on non EU manufactured goods. UK Treasury won't care if a UK consumer has bought something that already had EU import duties applied (duty liable when goods 1st imported into EU from US or elsewhere). Equally I can't see EU retailers wanting to get into "duty free" sales to U.K and manufacturers are quite likely to frown upon that practice anyway if it undercuts retailers in UK? 

If you are a manufacturer or producer of "something" - no tariffs apply between UK and EU but simply using the EU as a conduit for US or Chinese manufactured goods has to be treated differently?

I'll also like to add that I am not an expert in Import / Export but I like to think that I'm reasonably well versed in how business operates within different geographic / legal jurisdictions.

prowla

Maybe it’ll stimulate local manufacturing rather than companies fronting offshored factories. 

Whitecat

You do pay duty. It’s applicable only on goods costing £390 or more - but obviously loads of guitars do, amongst other things. 

Because of that threshold it would only be applied on transactions where you do not pay the VAT at source, so it would always be payable on import for items above that threshold. 

exocet

Whitecat said:

You do pay duty. It’s applicable only on goods costing £390 or more - but obviously loads of guitars do, amongst other things. 

Because of that threshold it would only be applied on transactions where you do not pay the VAT at source, so it would always be payable on import for items above that threshold. 

Whats the thought process behind paying VAT at source for transactions under £390 vs VAT at point of import for transactions over £390?
If a seller has gone through the expense of registering for VAT collection - why limit the max transaction threshold? 

fretmeister

exocet said:

Whitecat said:

You do pay duty. It’s applicable only on goods costing £390 or more - but obviously loads of guitars do, amongst other things. 

Because of that threshold it would only be applied on transactions where you do not pay the VAT at source, so it would always be payable on import for items above that threshold. 

Whats the thought process behind paying VAT at source for transactions under £390 vs VAT at point of import for transactions over £390?
If a seller has gone through the expense of registering for VAT collection - why limit the max transaction threshold? 

I like how you are expecting competence from this government.

gavin_axecaster

Duty threshold on imports is £135 - that's why the VAT-collected-at-point-of-sale threshold introduced from today is £135.

Over £135 imports are subject to duty (aka tariffs) hence the import duty and VAT will continue to be paid upon import by the purchaser. Whether or not any duty is applied will depend on the country of manufacture and any rules of origin clauses in the UK/EU trade deal.

Whitecat

Yeah, sorry, my error - £390 is the hand-carry duty free limit. By post it is indeed £135. 

Musicman20

What a mess.

tabano

this is bad for all, consumers and Uk builders,
no matter how I look at it I see loss..
I wonder how manny boutique Uk builders will be able to get through this....

Whitecat

New plot twist - turns out the EU are working on similar low-value consignment VAT legislation for next year. Meaning that UK (or any non-EU) businesses who sell into the EU will need to register for EU VAT (in the country of their choice) and bill it to their customers/remit quarterly if they don’t use a selling platform that does it for them. 

SteveRobinson

This must be what Alok Sharma means by new opportunities

richardhomer

SteveRobinson said:

This must be what Alok Sharma means by new opportunities

A tad disingenuous Steve - I think the full quote was ‘New opportunities for tax advisers’

jeztone2

prowla said:

Maybe it’ll stimulate local manufacturing rather than companies fronting offshored factories. 

No, because that will involve paying decent living wages.

gavin_axecaster

Whitecat said:

New plot twist - turns out the EU are working on similar low-value consignment VAT legislation for next year. Meaning that UK (or any non-EU) businesses who sell into the EU will need to register for EU VAT (in the country of their choice) and bill it to their customers/remit quarterly if they don’t use a selling platform that does it for them. 

It was supposed to come into force on Jan 1st same as UKs new legislation but Germany and Netherlands asked for a delay until 2022 due to their IT systems being behind schedule.

However it has only been delayed until July 2021 when the same rules will apply as the UK - all sellers outside of EU who sell to customers in the EU will need to collect and remit VAT on sales up to 150 euro. Sales over 150 euro will be treated as they are now, with duty and VAT paid by the purchaser upon import.

Also the distance selling thresholds on EU cross-border sales will be withdrawn and all EU sellers will have to charge the domestic VAT rate of the customer and remit to the customer's local Govt instead of charging the seller's domestic VAT rate as happens currently. This is basically expanding on the current rules for digital products sold in the EU (the Mini One Stop Shop).

Babones

Basically you will have to pay more, be it a bit, or a lot. Therefore glad I got something in, in December before all this 'freedom' happened.

Musicwolf

Non of this should come as a surprise as even the Brexiteers were accepting that there would be inflation and that our ecconomy would shrink.  Where the two sides differred was about how long it would take to recover and whether or not the promised long term benefits were real.

Rob1742

A minor inconvenience, remember we have £350m per month now for the NHS according to the Boris bus. 

I for one am holding back on a number of purchases as I am wanting to see companies settle into the new system. Many companies are uncertain on what to do as nobody knew what was going to happen. 

I can see situations where people get charged twice for VAT or possibly not charged VAT while companies adjust. 

Musicwolf

Rob1742 said:

A minor inconvenience, remember we have £350m per month now for the NHS according to the Boris bus. 

 

A month???!!!!  it said per week on the side of the bus.  You don't think this means that they were lying to us do you?