Import VAT when selling in UK in person but shipping to EU

[Kristen Lee]

Hiya,

We often sell goods to customers here in the UK at our shop who are from the EU. Often the items require assembly which means the customer can't take the goods away with them, and so we then need to ship them to their home addressin the EU. They pay VAT at the point of purcahse in-store and in person. When weship, we provide extensive paperwork showing the customer has paid VAT in the UK *in person* however we are finding they are still being required to pay VAT when it goes thrugh customs on their side. This doesn't make any sense to me, as if they took these items home with them, they wouldn't have to pay VAT twice - so why is this happening? Are we supposed to NOT charge them VAT in person here in the UK? But that doesn't make sense to me as it's a purcahse made within the UK, not an online purchase that the customer has made from their own country.

Thanks!

 

[Customs Geek]

Hi Kristen

UK VAT and EU vat are two separate things now we have left the EU.
In addition the UK no longer has a retail VAT export scheme either so the overseas customer can no longer claim back UK VAT when they take the goods out of the UK. It is therefore perfectly normal that an EU person buying goods in the UK in person would be charged both UK VAT and their own countries VAT.

The EU countries dont care whether the customer has paid VAT in the UK so you saying VAT has been paid in the UK will be ignored. They want their VAT paid in their country so VAT is charged at import. .

However If you are sending the goods to your customers overseas it may be possible to zero rate the VAT as goods for export. if you are exporting directly then will have the proof of export. Have a look at this guide.
www.gov.uk/guidance/vat-on-goods-exported-from-the-uk-notice-703

The only reason your customers won’t pay their local VAT on arrival home if they take them themselves will be if the goods are within their travellers allowance of €300 or they don’t declare the goods at all.
A similar allowance does not apply if the goods are sent via post or courier etc.
There is no value exemption limit for VAT which is charged on goods of any value.

 

[japancool]

You could ship it DDP, but there are limits.

 

[kantanLiving]

Hi Kristen, are you charging RRP including vat to any customer who enters the shop? and then only when you find out they are from EU that you tell them you have to ship it to them?

if what you sell always requires assembly and shipping to the customers EU address why not treat it as an export sale? That way you dont charge VAT since it will be considered an oversea trade. Then when you ship to the customer they will pay vat on import in there country.

Or can you not process the order via your website? or online POS and have the customer pay through the site, it will be treated as oversea sales since customer would enter there EU address. But if you do this method, you may need to register for IOSS.

 

[Customs Geek]

But if you do this method, you may need to register for IOSS.

IOSS is entirely optional and only applicable to goods under €150 in any case . Import VAT can still be paid at the time of import.

 

[Import&Export]

If the customer isn't taking possession of the goods in the UK, and you will be delivering the order to the EU, then just treat it as an export and zero rate the sale ?‍