VAT and US Vendors selling to UK from 1st Jan 2021

[Deleted member 1881]

Collecting VAT from the UK?
That is unbelievable and unethical. Why the UK citizens have to be treated differently than the other customers from around the world?
Just because of Brexit?

I suggest the VAT to be collected only from Boris's orders.

 

[SeanC]

If that is the case, why would a foreign retailer not just let the final recipient pick up the tab as usual and save themselves the extra coast and inconvenience of collecting and remitting to a foreign government? That is really onerous, especially on small businesses, as they already have enough to do dealing with their own government.

Bob

That is exactly what I expect most foreign retailers to do. Precisely nothing
This is a mechanism for the likes of Amazon

 

[SeanC]

Collecting VAT from the UK?
That is unbelievable and unethical. Why the UK citizens have to be treated differently than the other customers from around the world?
Just because of Brexit?

I suggest the VAT to be collected only from Boris's orders.

Small Consignment Relief i.e. the 15 GBP, 20 USD, 22 EUR VAT free allowance is being completely abolished across the EU too from July 2021 and similar VAT arrangements are also being applied

European tax and business compliance news - Avalara

European VAT and business compliance news and information from Avalara.

www.avalara.com

 

[MichaelS]

If that is the case, why would a foreign retailer not just let the final recipient pick up the tab as usual and save themselves the extra coast and inconvenience of collecting and remitting to a foreign government? That is really onerous, especially on small businesses, as they already have enough to do dealing with their own government.

Bob

+1. It's also hard to believe that the UK tax authorities wouldn't prefer collecting all taxes themselves at entry rather than relying on vendors in foreign countries to send it in (and who apart from North America may not even speak English). But stranger things have happened

 

[MichaelS]

Small Consignment Relief i.e. the 15 GBP, 20 USD, 22 EUR VAT free allowance is being completely abolished across the EU too from July 2021 and similar VAT arrangements are also being applied

European tax and business compliance news - Avalara

European VAT and business compliance news and information from Avalara.

www.avalara.com

Very interesting avalara report, I was not aware thank you (our messages crossed).

 

[Rufusdog]

Why would a seller/retailer in a foreign country collect sales tax/VAT for a government that is not their own? That would be a lot of extra book and remittance work. I can see a lot of businesses refusing to ship out of country.

Bob

Bob, if a Canadian resident purchases from on-line vendors in the USA, such as LL Bean and Land’s End for example, the vendors collect Canadian HST (our VAT equivalent) and customs duties. Many American vendors, such as Bullgoose, however, don’t do this so sometimes the buyer has to pay at the time of delivery and sometimes not. No big deal either way in my book.

 

[R181]

Bob, if a Canadian resident purchases from on-line vendors in the USA, such as LL Bean and Land’s End for example, the vendors collect Canadian HST (our VAT equivalent) and customs duties. Many American vendors, such as Bullgoose, however, don’t do this so sometimes the buyer has to pay at the time of delivery and sometimes not. No big deal either way in my book.

I have not had that happen when I order from the US and it is shipped via USPS mail. Any HST, duties or tariffs owing are collected by Canadian Border Services Agency when they enter Canada. I keep my orders to around $100 and most of the time there is little to none deemed owing by CBSA.

Oth, if it is shipped to Canada via UPS, Fed EX and DHL, any courier service, they will collect the HST and any other duties payable plus their own exorbitant brokers fees to boot. I have been burned badly by these courier services that I will not use them for any goods that I import.

Bob

 

[Rufusdog]

I have not had that happen when I order from the US and it is shipped via USPS mail. Any HST, duties or tariffs owing are collected by Canadian Border Services Agency when they enter Canada. I keep my orders to around $100 and most of the time there is little to none deemed owing by CBSA.

Oth, if it is shipped to Canada via UPS, Fed EX and DHL, any courier service, they will collect the HST and any other duties payable plus their own exorbitant brokers fees to boot. I have been burned badly by these courier services that I will not use them for any goods that I import.

Bob

Bob, of the American vendors I buy from Land’s End and LL Bean, and there are others, collect HTS and duties at their end and there is no brokerage charge for this; quite often shipping is free over a certain threshold as well. LL Bean uses Border Free, I believe, but I can’t remember the forwarding service LE uses. I too won’t buy from a foreign vendor who insists on using UPS, FedEx or DHS with me having to pay brokers fees. I will, however, buy from foreign vendors who will ship via the postal service and pay the “smallish“ handling fee Canada Post levies if HST and duty has to be collected by them.

 

[R181]

Bob, of the American vendors I buy from Land’s End and LL Bean, and there are others, collect HTS and duties at their end and there is no brokerage charge for this; quite often shipping is free over a certain threshold as well. LL Bean uses Border Free, I believe, but I can’t remember the forwarding service LE uses. I too won’t buy from a foreign vendor who insists on using UPS, FedEx or DHS with me having to pay brokers fees. I will, however, buy from foreign vendors who will ship via the postal service and pay the “smallish“ handling fee Canada Post levies if HST and duty has to be collected by them.

Thanks, that is good to know as I was not aware of services like "Border Free". Yes, the Canada Post handling fee is reasonable especially compared to brokers fees. No complaints there.

Bob

 

[Paul]

The bill has received Royal Assent so will be law on Jan 1st. May be the first & only of it's kind though. I can see why ebay & Amazon sales are counted as taxable, they control the whole process so whether the goods are held internationally or not, most govs now consider online market place sales as domestic & taxable. As others have pointed out what this act really does is raise the import threshold to £135 GBP. I doubt this was the intention but how many overseas retailers will do the extra work & make themselves less competitive when there is no sanction for non compliance. In the future, technology may make it possible to only accept commercial shipments from VAT registered vendors, so may be this is a bill ahead of it's time.

 

[halvor]

Brexit being a fact (more or less, one could say), consider yourself lucky you live in a bigger country to which exports are higher and with which, in consequence, many vendors will want to join a VAT on e-commerce scheme. (Not knowing too much of how this is being arranged, I simply presume that it depends on individual agreements rather than some collective one - Norway is small and uninteresting, and indeed, being spared the handling fee is the case here as well, but I have yet to buy anything from a vendor with a VOEC agreement with Norwegian tax authorities.)

 

[Steve]

If I were an American vendor, I'd stop selling to UK customers due to the hassle of the bloody VAT. That being said, I've never had an American soap/cream that was better than what is available from the plethora of soaps/creams on this side of the Atlantic.

I hope that wasn't too political.