How to collect Vat from China

[Trillaruben]

Hi all I’ve had a limited company for 2 years, the basic premise of my business is buying things from China where I have a contact sending money to their account and then selling in my store which has worked out well so far, last year I hit 85k so I signed up for the flat rate scheme and been paying 8.5% in a couple of months it looks like I’m about to hit 150k and therefore need to pay 20% which is fine if there was a way I could collect the vat from my supplier but I’m unsure how to?

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[kulture]

I would suggest that you get an accountant. Being VAT registered you can claim back VAT that you have paid . If you have paid VAT then you should have a VAT invoice. You deduct the VAT you have paid from the VAT you have charged and pay the balance to HMRC. You do not get this back from your supplier.

 

[paulears]

If the Chinese have your VAT/EORI number, the current situation seems to be that the do not actually charge you VAT - they were advised by our HMRC that they need to charge VAT on their sales, unless the UK buyer is registered. I have not been charged any VAT by them at all this year - they all seem to supply ex-VAT, which means there is nothing to 'claim back' so my first quarter return had the lowest amount of VAT on the input tax side. It doesn't actually change the amount you pay, because if they had charged it, it would have come off - leaving the same end product. If the goods are paid for by a third party, out of the country, I've no idea how this impacts how you are paying for the goods - this alone would want me to have an accountant to ask. Technically, are you buying from China, or from your friend? Is there some advantage to them paying for it?

 

[Paul Kelly ICHYB]

I appreciate that I have not imported in a few years, but when did Chinese suppliers start charging UK VAT?

 

[paulears]

Brett started it. HMRC instructed overseas supplier to the UK to start process to levy the VAT at the country of origin and the bigger people like alibaba and aliexpress and similar have UK VAT numbers. There is a sort f cutoff at I think, £135? Under that, for ordinary buyers they just add 20%. Over that and the delivery service in the UK adds it, plus the handling, but something changed in 2022 and that's when my invoices went back to the old system and no VAT was added in china, and no VAT added by the carrier?

I also buy from Germany and that got a bit confusing last year, but has settled and now they treat the UK as export and that 135 thing seems to work, but not in every case - I suspect everyone is totally confused. I sell a lot on eBay internationally and even that appears random - some EU countries have VAT deducted from the sale price, so a 120 item sells, and they pay me 100, but other times the 120 item pays 120 - No idea how it works, but it works badly!