Importing goods from the EU and claiming VAT

Discussion in 'International Business' started by CM, Feb 10, 2021.

  1. CM

    CM UKBF Newcomer Free Member

    4 0
    Hi all,

    I've spent some time looking into claiming the input VAT on stock I buy from the EU, but my eyes are starting to go square. :(

    I also fear I'm looking for a simple answer to a complicated question, but here goes.

    I'm a VAT registered business in the UK and I import some goods from the EU, namely from Amazon currently. When I receive an invoice from them, the VAT is 0%.

    When I sell an item, I charge VAT on my sale. How do I claim back the VAT on the item I've imported?

    Is this the reverse charge mechanism or am I completely off the mark here?

    Also, would I be wise in appointing a customs agent and/or joining a Chamber of commerce?

    Thanks in advance!
     
    Posted: Feb 10, 2021 By: CM Member since: Feb 6, 2021
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    27,231 3,345
    Have you any proof you paid VAT on your import?
     
    Posted: Feb 10, 2021 By: Mr D Member since: Feb 12, 2017
    #2
  3. CM

    CM UKBF Newcomer Free Member

    4 0
    No proof, as on the Amazon order the VAT is 0.00.

    I've paid an Import Fee Deposit, but no idea as to what makes up that figure (i.e. if it includes VAT or not)
     
    Posted: Feb 10, 2021 By: CM Member since: Feb 6, 2021
    #3
  4. Trevor Andrews

    Trevor Andrews UKBF Newcomer Free Member

    23 6
    Sorry if I am off the mark here but if Amazon charge you 0% VAT then you have no VAT to claim back as you have not paid any.
     
    Posted: Feb 11, 2021 By: Trevor Andrews Member since: Feb 9, 2021
    #4
  5. CM

    CM UKBF Newcomer Free Member

    4 0
    I hope you are wrong, for my sake :)

    As we are outside of the EU, I don't believe Amazon EU are allowed to charge VAT to the UK.

    If I find the answer from elsewhere, I'll be sure to post it onto the forum to knowledge share.
     
    Posted: Feb 11, 2021 By: CM Member since: Feb 6, 2021
    #5
  6. Paul Norman

    Paul Norman UKBF Ace Free Member

    3,096 983
    The Amazon invoices shows that they are not charging you any VAT.

    So it is true that you are not able to claim any back.

    There is no other answer, unless Amazon change their documentation to say otherwise.
     
    Posted: Feb 11, 2021 By: Paul Norman Member since: Apr 8, 2010
    #6
  7. Trevor Andrews

    Trevor Andrews UKBF Newcomer Free Member

    23 6
    Firstly you cannot claim the EU VAT as it is zero. Perhaps you are thinking of the IMPORT VAT charged by the UK Government. I do not know for sure, but as this is an IMPORT Charge you may not be able to claim it back, but I would speak to your accountant.

    We are in Spain and when we bought from UK we had to pay the Spanish VAT rate 21% to the Spanish Government.

    I have shown below an extract from one of our UK suppliers and it would seem that these import duties have to be paid to the courier.
    -----------
    VAT
    UK VAT will be zero rated for goods leaving the UK (exported). Once the goods enter the destination country Import VAT will normally need to be paid, VAT registered businesses can reclaim the VAT incurred subject to the normal rules in their country. This is the same as pre-Brexit.

    Import duty
    Destination country import duty is applicable to some products; we have now added the EU product duty rates and cost per unit to our product pages online. The EU duty information online is for your information only and is not included in our price.
    EU duty rates for products sold range between 0% and 12% with an average of less than 2.85% (This is correct on 13th January 2021)*.

    Duty, VAT and fee display
    To assist in your purchase decisions, we are currently working on showing you the approximate destination country’s duty, disbursement fees and VAT on the checkout page. This cost is due on import. The amount will not be paid to us; it will be invoiced to you and paid by you to our couriers, who will then pay the taxes/duty to the correct tax/customs department. We aim to have this display available within a few days.
    ----------------
    I hope this helps
     
    Posted: Feb 11, 2021 By: Trevor Andrews Member since: Feb 9, 2021
    #7
  8. Paul Kelly ICHYB

    Paul Kelly ICHYB UKBF Legend Staff Member

    5,805 829
    What VAT do you want to claim back - you haven't been charged any?
     
    Posted: Feb 11, 2021 By: Paul Kelly ICHYB Member since: Jan 21, 2008
    #8
  9. CM

    CM UKBF Newcomer Free Member

    4 0
    Thanks for this. Yes, it does help.

    I've spoken with a client that I used to work with today, who works in imports and exports who has also helped me clarify things.

    I won't put any information on the forum until it is clear in my mind on what the answer is!

    It's difficult to explain without going too far into it or starting a debate, which wasn't the point of my post. Also, it's difficult to give all the information without writing a massive post. Again, not the point of my initial post.

    In short, I'm a VAT registered business who is expected to charge VAT. But, how can I charge VAT knowing that I can't claim it. (Rhetorical) Here lies the can of worms that has just been opened.

    When buying the items from Amazon EU (for example), I pay a 'import fees deposit' which is pretty much 20% on every item I buy. Amazon are not forthcoming as to what exactly makes up that 'deposit', but I have found out that it is taxes and fees. I understand now that the courier for Amazon pays the VAT or import VAT (I'm unsure on precise terms, so bear with me.) So, I believe I obtain an import entry document from them, but I need to fact check this myself by the looks of things.

    On another note:

    It's also nice to know when I ask this question, there are lots of other people completely in the dark and/or clueless too! In the nicest way possible, that makes me feel better and that I'm not making a mountain out of a molehill.
     
    Posted: Feb 11, 2021 By: CM Member since: Feb 6, 2021
    #9
  10. japancool

    japancool UKBF Big Shot Full Member

    3,749 716
    Ditch Amazon and go direct to the seller?
     
    Posted: Feb 11, 2021 By: japancool Member since: Jul 11, 2013
    #10
  11. Mr D

    Mr D UKBF Legend Free Member

    27,231 3,345
    Not being able to claim is a plus!!!!
    You benefit from the cashflow benefit of not paying it out in the first place, whereas your competitors buying elsewhere have to pay out then claim back.
    You end up no worse off than them but your cashflow position is a lot better for the same purchases and sales.
     
    Posted: Feb 11, 2021 By: Mr D Member since: Feb 12, 2017
    #11
  12. DontAsk

    DontAsk UKBF Ace Free Member

    1,846 289
    The same way you charge VAT even if you buy goods from a non-VAT registered supplier and don't pay any VAT.

    Did the supplier clearly remove the VAT, i.e., charge you 5/6 of the VAT inclusive price? If not you may be being ripped off by them as well as paying the input VAT on entry to the UK.
     
    Posted: Feb 11, 2021 By: DontAsk Member since: Jan 7, 2015
    #12
  13. DontAsk

    DontAsk UKBF Ace Free Member

    1,846 289
    That rather depends on what the OP is paying relative to competitors.
     
    Posted: Feb 11, 2021 By: DontAsk Member since: Jan 7, 2015
    #13
  14. Paul Kelly ICHYB

    Paul Kelly ICHYB UKBF Legend Staff Member

    5,805 829
    They are two different things. If they charged VAT your gross cost would have been 20% more and cashflow affected! Buying things without VAT and selling them with are just things that happen in business. You ex VAT margin will remain the same.

    You are stressing over something that you shouldn't be worried about! Unless, of course, there are still things that we do not know about!
     
    Posted: Feb 12, 2021 By: Paul Kelly ICHYB Member since: Jan 21, 2008
    #14
  15. MikeHunter

    MikeHunter UKBF Contributor Full Member

    32 7
    I sell services (rather than a physical product). When we left the EU, we were advised by our accountant that reverse charge rules no longer apply. This means we treat customers in the UK the same as anywhere else in the world. Zero rated for VAT. I'm assuming that the same applies with imports into the UK from EU countries. If the seller doesn't charge you VAT (as others have said) you don't have anything to reclaim. I suspect the question is therefore about duties charged on the UK side. As with any purchase, if you have proof of the cost, you should then be able to reclaim it.
     
    Posted: Feb 15, 2021 By: MikeHunter Member since: May 8, 2006
    #15
  16. Paul Kelly ICHYB

    Paul Kelly ICHYB UKBF Legend Staff Member

    5,805 829
    @MikeHunter If you are VAT registered and your services are VATable, you have to charge VAT to your UK customers. The way UK supplies to UK companies has not changed (outside of NI).
     
    Posted: Feb 15, 2021 By: Paul Kelly ICHYB Member since: Jan 21, 2008
    #16
  17. MikeHunter

    MikeHunter UKBF Contributor Full Member

    32 7
    Sorry, just reread my post. Of course we charge VAT in the UK, I somehow managed to write "UK" instead of "EU". EU customers were subject to reverse charge, but are now "outside the scope of UK VAT" - like a business in another part of the world. Hope that clarifies what I was trying (and failing) to say.
     
    Posted: Feb 15, 2021 By: MikeHunter Member since: May 8, 2006
    #17
  18. Spur Support Services

    Spur Support Services UKBF Regular Free Member

    195 41
    VAT claimable is all based on documentation. If no UK VAT is shown as paid, then you can't claim anything.
    Ensure that your suppliers including Amazon have a record of your VAT and EORI number and then you should receive a monthly certificate from HMRC confirming what Import VAT has been paid, and since 1 January the supplies that have been subjected to the "postponed VAT accounting" process are confirmed on the monthly statement available via https://www.gov.uk/guidance/get-your-postponed-import-vat-statement

    I have always thought that Amazon were a bit misleading to VAT registered sellers, as their fees were all fee under the reverse charge, whereas you have to incorporate VAT in your sales price.
    This can easily lead you to making a loss on low value FBA items sold in the EU without realising, so care needs to be taken in understanding margins.
     
    Posted: Feb 17, 2021 By: Spur Support Services Member since: Aug 21, 2020
    #18