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Reduce import VAT to 5% on pre owned items


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If you agree please sign the petition

https://petition.parliament.uk/petitions/572127

The problem is that now we (the UK) have left the EU everything being imported has VAT at 20%, making buying anything from Europe is difficult.  On new items the seller should be able to show the price less VAT for export.  But on used items, including of course watches, most sellers are registered on the margin scheme for VAT and are not allowed to show prices less this VAT.  

For example, a £100 watch new would be invoiced at £100 less the local VATs so about £80, and we would get charged 20% of £80 VAT (plus a handling fee), but nett cost is roughly the same - about £100

a £100 used watch would cost us £100 plus 20% VAT, plus a fee to collect the tax, so over £120

 

The margin scheme exists because tax will have been paid on the used item when it was new, so the margin scheme only taxes the gross profit margin when that item is sold again.  The pre owned tax hits the Europeans too, so much of my export to Europe has just stopped - this will come back, as they still buy from outside the EU for other items and pay import VAT of those too, but mentally they have to adjust and in some cases watches will be cheaper to buy from within the EU.

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2 hours ago, scottswatches said:

If you agree please sign the petition

https://petition.parliament.uk/petitions/572127

The problem is that now we (the UK) have left the EU everything being imported has VAT at 20%, making buying anything from Europe is difficult.  On new items the seller should be able to show the price less VAT for export.  But on used items, including of course watches, most sellers are registered on the margin scheme for VAT and are not allowed to show prices less this VAT.  

For example, a £100 watch new would be invoiced at £100 less the local VATs so about £80, and we would get charged 20% of £80 VAT (plus a handling fee), but nett cost is roughly the same - about £100

a £100 used watch would cost us £100 plus 20% VAT, plus a fee to collect the tax, so over £120

 

The margin scheme exists because tax will have been paid on the used item when it was new, so the margin scheme only taxes the gross profit margin when that item is sold again.  The pre owned tax hits the Europeans too, so much of my export to Europe has just stopped - this will come back, as they still buy from outside the EU for other items and pay import VAT of those too, but mentally they have to adjust and in some cases watches will be cheaper to buy from within the EU.

Definitely agree - it has killed me buying what I thought was a good bargain from Spain!

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3 hours ago, scottswatches said:

If you agree please sign the petition

https://petition.parliament.uk/petitions/572127

 

I understand the idea of reducing the VAT rate on used goods to 5% although you would still have extra costs because of the handling fee but was not clear about the other bit of the petition about allowing these goods to be bought and sold under the VAT margin scheme. Surely they can still be sold under the VAT margin scheme to UK customers but for EU countries import VAT would still be charged in the customer's country.

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57 minutes ago, richy176 said:

I understand the idea of reducing the VAT rate on used goods to 5% although you would still have extra costs because of the handling fee but was not clear about the other bit of the petition about allowing these goods to be bought and sold under the VAT margin scheme. Surely they can still be sold under the VAT margin scheme to UK customers but for EU countries import VAT would still be charged in the customer's country.

Correct.  But if the UK set an example on used items, where the VAT has already been paid at the original time of sale, the EU might follow (in about 4 years...)  This would enable more people to buy from Europe without paying over the odds even if the EU didn't match the deal going their way

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I work moving and clearing aircraft prts and engines from all around the world 

this brexiit has created confusion both here and in the eu.. I’m forever advising eu shippers what to do and pre-clear shipments it’s mad I tell you 

road freight is catching up what we have been used to in the airfreight business 

I worked at lhr mid eighties when there where only a handful of eu members and at different levels etc so I’m used to it.. got a good system of preclearing raid arrivals now but it will have a knock on effect without a doubt in all sectors or life and business 

can’t wait to retire lol 

stay safe and sane :biggrin:

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The reason they are hesitant to implement this suggestion in full is because of the incentive to sell "new" goods as "used"  either by carousel-type import-export frauds or by just ghost-purchasing. True for your business this would not be a danger from a Potential-Duty-Lost point of view , but higher up the revenue ladder it certainly would be. So I can see why they don't want that door opened .... but I can see that you and similar sellers certainly need some sort of accommodation or solution ... even if its a rebate scheme .. :thumbsup:

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16 hours ago, Jet Jetski said:

Now I have someone saying he is filling in customs papers and needs my national identification number!  I told him this is the UK and we don't have identification numbers.

This suggests that a passport number or unique tax reference may be used but maybe your NI number would be enough. Just another `box' that may need to be checked at point of import but do they have the staff to do all this?

https://support-pro.packlink.com/hc/en-gb/articles/360000874939-The-Customs-Invoice-and-How-to-Complete-It#:~:text=Both the sender's and the,will be blocked at customs.

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1 hour ago, richy176 said:

This suggests that a passport number or unique tax reference may be used but maybe your NI number would be enough. Just another `box' that may need to be checked at point of import but do they have the staff to do all this?

https://support-pro.packlink.com/hc/en-gb/articles/360000874939-The-Customs-Invoice-and-How-to-Complete-It#:~:text=Both the sender's and the,will be blocked at customs.

The chances of me giving a stranger my NI number across the internet are zero.  eBay did tag some sort of code onto my address when he printed the label, commencing GB , so I told him to use that.

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17 minutes ago, Jet Jetski said:

The chances of me giving a stranger my NI number across the internet are zero. 

It also raises the question of whether customs have access to the system that manages NiNo's, which I very much doubt, so it's a pointless exercise in any case.

Worth remembering that your NiNo is a lifelong identifier and a defacto 'identity card', that your whole life history is recorded against. From when first issued, all the addresses you have ever lived at, who you have worked for, tax paid, benefits claimed and so on, until the day you die. 

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24 minutes ago, Jet Jetski said:

The chances of me giving a stranger my NI number across the internet are zero.  eBay did tag some sort of code onto my address when he printed the label, commencing GB , so I told him to use that.

That code is the tax identification reference ..... :thumbsup: It confirms that eBay have identified you by confirming your address against bank details. They can only issue those references if they have that data. No need for NI numbers ....

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24 minutes ago, Jet Jetski said:

The chances of me giving a stranger my NI number across the internet are zero.  eBay did tag some sort of code onto my address when he printed the label, commencing GB , so I told him to use that.

Nor would I - it is just another problem as the sender will be told they have to complete certain details otherwise it may get rejected by customs and then the sender has additional costs in having the package returned. Much easier when we were part of the EU.

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On 04/02/2021 at 13:01, scottswatches said:

If you agree please sign the petition

https://petition.parliament.uk/petitions/572127

The problem is that now we (the UK) have left the EU everything being imported has VAT at 20%, making buying anything from Europe is difficult.  On new items the seller should be able to show the price less VAT for export.  But on used items, including of course watches, most sellers are registered on the margin scheme for VAT and are not allowed to show prices less this VAT.  

For example, a £100 watch new would be invoiced at £100 less the local VATs so about £80, and we would get charged 20% of £80 VAT (plus a handling fee), but nett cost is roughly the same - about £100

a £100 used watch would cost us £100 plus 20% VAT, plus a fee to collect the tax, so over £120

 

The margin scheme exists because tax will have been paid on the used item when it was new, so the margin scheme only taxes the gross profit margin when that item is sold again.  The pre owned tax hits the Europeans too, so much of my export to Europe has just stopped - this will come back, as they still buy from outside the EU for other items and pay import VAT of those too, but mentally they have to adjust and in some cases watches will be cheaper to buy from within the EU.

The logic has always been that the tax has already been paid on an old item.    

Its irritating to pay VAT on old items from the states, and because they love to over-declare values to its always top rate.  It often makes it not worth it.

As to the EU, our government won't have previously received taxes on items purchased there and so want their piece of the pie.

I happen to know that MG cars approaching the 25 year mark are liable to rise in value due to the US import rules (must be something to do with their rules on classic cars)  I would think it certainly reasonable to exempt antique or vintage items from VAT, this way nobody would be trying to deprive the treasury of revenue by sourcing new items from the EU at a reduced tax rate. 

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31 minutes ago, JonnyOldBoy said:

They do for anyone who has paid class 2 or 4 National Insurance contributions.

I'm not so sure. But happy to be corrected. I'm a long time out of the game. That's revenues data and if needing to check a random NiNo on a watch being imported, I doubt they could just press a button and have instant access to that data. I know how difficult it was when the computerised system was first developed and then introduced in about 1990. Where I worked was okay, we could literally press a button and had unrestricted access to various security levels, although all our actions were automatically recorded. Bit over the years, controls got tougher and tougher.  

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5 minutes ago, Caller. said:

I'm not so sure. But happy to be corrected. I'm a long time out of the game. That's revenues data and if needing to check a random NiNo on a watch being imported, I doubt they could just press a button and have instant access to that data. I know how difficult it was when the computerised system was first developed and then introduced in about 1990. Where I worked was okay, we could literally press a button and had unrestricted access to various security levels, although all our actions were automatically recorded. Bit over the years, controls got tougher and tougher.  

They would not have access to the full revenue data ,but would be able to do a basic validation on the number provided. The UTNs for import to the UK are mostly about validation of the item as legitimate , in other words incoming for personal import as opposed to business import [ which needs an EORI reference , not a tax reference ].

I have spent the last few weeks trying to sort out this mess to get my imports from Germany running smoothly for one of my businesses .... finally I hope its sorted .... I will let you know in a few days when the first consignment under new Customs rules arrives .... 

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  • 2 weeks later...

The effect appears colossal to me, when buying from Europe - I bought a watch for 130 euro and the total bill came to 165 GBP.  Now some of that was of course shipping, which was supposed to be a rapid service, unfortunately it took us days to figure out the customs forms and what to fill in where! (see above).  So just shopping domestically now where at all possible, though I have had some success pleading for a price reduction because of the dreaded VAT I'll need to pay.  But it makes slim pickings for the seller when eBay take their commission, fees for selling, and fees for paying out.

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