Post-Brexit import taxes and duties
Discussion
Morning all!
Having recently started a new job with an EU company that does not have a VAT registered UK subsidiary and therefore apparently cannot act as something called the Importer of Record, I am being treated to a whole new post-Brexit joy, and it's making me feel thicker than anything else I've encountered in 30 years of work!
Could anyone point me at a clear, easy guide to what taxes, duties and fees are levied, under what circumstances, who levies them, who has to pay them and what portion is reclaimable?
My scenario is made more complicated by also selling through resellers but then shipping the product direct to the end customer!
Having recently started a new job with an EU company that does not have a VAT registered UK subsidiary and therefore apparently cannot act as something called the Importer of Record, I am being treated to a whole new post-Brexit joy, and it's making me feel thicker than anything else I've encountered in 30 years of work!
Could anyone point me at a clear, easy guide to what taxes, duties and fees are levied, under what circumstances, who levies them, who has to pay them and what portion is reclaimable?
My scenario is made more complicated by also selling through resellers but then shipping the product direct to the end customer!
Kermit power said:
Morning all!
Having recently started a new job with an EU company that does not have a VAT registered UK subsidiary and therefore apparently cannot act as something called the Importer of Record, I am being treated to a whole new post-Brexit joy, and it's making me feel thicker than anything else I've encountered in 30 years of work!
Could anyone point me at a clear, easy guide to what taxes, duties and fees are levied, under what circumstances, who levies them, who has to pay them and what portion is reclaimable?
My scenario is made more complicated by also selling through resellers but then shipping the product direct to the end customer!
How do they employ you without a UK subsidary?Having recently started a new job with an EU company that does not have a VAT registered UK subsidiary and therefore apparently cannot act as something called the Importer of Record, I am being treated to a whole new post-Brexit joy, and it's making me feel thicker than anything else I've encountered in 30 years of work!
Could anyone point me at a clear, easy guide to what taxes, duties and fees are levied, under what circumstances, who levies them, who has to pay them and what portion is reclaimable?
My scenario is made more complicated by also selling through resellers but then shipping the product direct to the end customer!
I think we need more info Kermit.
Why is the company not VAT registered? Doesn't reach the threshold or for some reason exempt?
What are you wanting to do?
You will have to pay VAT and possibly duty on product coming into the UK.
Can you explain what the company is actually doing? What its trade is?
I can't think of many examples where duty can be reclaimed but it can be offset against trading profit. The same is true with VAT if you're not registered but I'm confused over why the company isn't VAT registered?
I take it that the UK subsidiary has got an EORI number, or Economic Operators Registration and Identification number which is a unique identifier used for customs clearance in the European Union. It's required for all types of customs operations, including imports, exports, and transit
Why is the company not VAT registered? Doesn't reach the threshold or for some reason exempt?
What are you wanting to do?
You will have to pay VAT and possibly duty on product coming into the UK.
Can you explain what the company is actually doing? What its trade is?
I can't think of many examples where duty can be reclaimed but it can be offset against trading profit. The same is true with VAT if you're not registered but I'm confused over why the company isn't VAT registered?
I take it that the UK subsidiary has got an EORI number, or Economic Operators Registration and Identification number which is a unique identifier used for customs clearance in the European Union. It's required for all types of customs operations, including imports, exports, and transit
Edited by Pistom on Tuesday 22 October 11:04
We sell IT products that are zero rated for duty, so only VAT to worry about. The UK subsidiary is just there to employ the small handful of employees we have here.
All business is transacted between head office in Germany and either business partners or direct customers here and invoiced accordingly, primarily because this is what we had before we had employees here, and still is in other EU countries without local employees. It seems it was extremely simple before Brexit!
The company is fastidious about making sure everything is totally legal and above board, so I'm sure it's all correct, but it's an absolute nightmare to try and understand and explain!
All business is transacted between head office in Germany and either business partners or direct customers here and invoiced accordingly, primarily because this is what we had before we had employees here, and still is in other EU countries without local employees. It seems it was extremely simple before Brexit!
The company is fastidious about making sure everything is totally legal and above board, so I'm sure it's all correct, but it's an absolute nightmare to try and understand and explain!
Pistom said:
This probably sounds more complex than it is.
It sounds to me as if the subsidiary that you are working for is separate to the organisation which is selling/invoicing the goods. So in that case, you're not an Importer of Record - your client is.
Correct. We (so I'm told) can't be the Importer of record because we're not VAT registered. It sounds to me as if the subsidiary that you are working for is separate to the organisation which is selling/invoicing the goods. So in that case, you're not an Importer of Record - your client is.
What I've been trying to figure out is who gets invoiced what by whom, when and why. You'd think it would be simple to work out, wouldn't you?
The weirdest part at the moment is that we don't sell hardware components as a separate line item, but apparently VAT is charged at the moment of import on said HW components' manufacturing price, so anyone with one of our customs invoices can see what that manufacturing price is???
Kermit power said:
Correct. We (so I'm told) can't be the Importer of record because we're not VAT registered.
What I've been trying to figure out is who gets invoiced what by whom, when and why. You'd think it would be simple to work out, wouldn't you?
The weirdest part at the moment is that we don't sell hardware components as a separate line item, but apparently VAT is charged at the moment of import on said HW components' manufacturing price, so anyone with one of our customs invoices can see what that manufacturing price is???
Confused by this as you've already said its your european entity which is transacting and supplying the goods.What I've been trying to figure out is who gets invoiced what by whom, when and why. You'd think it would be simple to work out, wouldn't you?
The weirdest part at the moment is that we don't sell hardware components as a separate line item, but apparently VAT is charged at the moment of import on said HW components' manufacturing price, so anyone with one of our customs invoices can see what that manufacturing price is???
then you've mentioned multiple employees.
If the staff costs are higher than 90k presumably the business needs to register for PAYE and VAT?
As stated above it is actually a lot simpler than it seems:
Check out this link for B2B digital services import VAT:
https://www.vatcalc.com/global/vat-on-cross-border...
The exporting non UK business does an invoice without VAT and no need to register either. The importing customer does a VAT reverse charge on their VAT return.
However if physical hardware is also involved it then becomes murkier.
Check out this link for B2B digital services import VAT:
https://www.vatcalc.com/global/vat-on-cross-border...
The exporting non UK business does an invoice without VAT and no need to register either. The importing customer does a VAT reverse charge on their VAT return.
However if physical hardware is also involved it then becomes murkier.
Ean218 said:
As stated above it is actually a lot simpler than it seems:
Check out this link for B2B digital services import VAT:
https://www.vatcalc.com/global/vat-on-cross-border...
The exporting non UK business does an invoice without VAT and no need to register either. The importing customer does a VAT reverse charge on their VAT return.
However if physical hardware is also involved it then becomes murkier.
Thanks for this!Check out this link for B2B digital services import VAT:
https://www.vatcalc.com/global/vat-on-cross-border...
The exporting non UK business does an invoice without VAT and no need to register either. The importing customer does a VAT reverse charge on their VAT return.
However if physical hardware is also involved it then becomes murkier.
We do indeed have physical hardware involved, but to make it even murkier, it's not actually sold but leased and wrapped into the overall subscription cost.
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