Understanding UK VAT

[narad]

As it pertains to custom guitars: if you have a custom guitar shipped from an EU country to the UK, do you have to pay the 20% VAT when it lands? I thought this was the case, but I just heard differently and would like to double check. I know where must be some UK guys who ordered something from the slew of great EU luthiers and would know for sure.

 

[StevenC]

If you order something from an EU country (and some others with trade deals) to be delivered to an EU country, you pay the VAT in the country where the product is delivered.

Example:
My Strandberg should be charged at 20% since I'm in the UK, despite Sweden having a 25% VAT rate.

Better Example:
Go to thomann.de and change from country to country and look how the price on a product changes due to VAT changes.

Hope that helps.

 

[narad]

I appreciate your answer but I don't like it ;-)

 

[StevenC]

What were you hoping for?

 

[asfeir]

the Daemoness will be tax free though so not so bad

 

[StevenC]

the Daemoness will be tax free though so not so bad

He'd still have to pay 20% VAT, but that may or may not be included in the price.

 

[asfeir]

He'd still have to pay 20% VAT, but that may or may not be included in the price.

Really? I though this was only applicable to registered companies.

 

[StevenC]

Really? I though this was only applicable to registered companies.

I'm actually not entirely sure on that. I know that you have to be a registered business to claim VAT back on purchases, but not sure how paying VAT works in that situation. Whether it's a "strictly above board" issue or not is where my understanding becomes hazy.

 

[narad]

Yea, I think the Daemoness will be good. The Vik and Strandberg though...

I guess I was hoping that when you order from EU businesses you pay the business the extra VAT - which, though a bit counter-intuitive in terms of the tax going to the correct country - would explain some of the option menus I've seen on German guitar sites. Then naturally many builders wouldn't charge you the additional tax. If it is taken from the UK customs agency, as it would be done in the US, then it just really sucks. I don't allocate an extra 20% in my head to custom guitar orders! Of course, my upcoming builds (besides the Daemoness) were all projected to be done while I am still living in the US.

 

[The Reverend]

20% tax rates? That's insane!

 

[StevenC]

I may have worded that wrongly, narad, here's a more detailed explanation, I think.

Vik is in Belarus, which isn't in the EU, so I think you'll have to pay VAT plus customs duty of 3.7%. Strandberg will be 20% and no customs. (By the way, the top on your Strandberg is awesome!) You will be paying the 20% to Ola, though, and you'll pay VAT and duty on the Vik when it lands (provided they decide to tax you that day...).

When are you moving to the UK and where?



We have a 5% rate for energy and children's car seats etc. and a 0% rate for most food and children's clothes. I personally don't mind the 20%, though I miss having 17%, when we have the free health care, children's dental care and such.

 

[Watty]

Aren't all of these rates designed to encourage local consumption given how the GBP et al stack up against other currencies?

Edit: Aside from all the benefits that cry "socialism." (see: civilized)

 

[Murmel]

Does the UK have the same VAT percentage for every type of goods? Sweden has a standard rate of 25%, but for some goods, like food, it's lower. Food is expensive enough as it is, I wouldn't want to think about how much it would cost at 25%

Websites generally list the prices including VAT so you don't have to calculate if you're a private customer. I guess it may be different when buying from smaller companies like guitar builders.

Better Example:
Go to thomann.de and change from country to country and look how the price on a product changes due to VAT changes.

The reason why I'm happy Sweden hasn't adopted Euro yet. You can get a lot more for your money ordering from a country with Euro thanks to the Swedish Krona - Euro exchange rate.

 

[asfeir]

For the VIK a trip to belarus will surely be less expensive than the VAT..

 

[StevenC]

Does the UK have the same VAT percentage for every type of goods? Sweden has a standard rate of 25%, but for some goods, like food, it's lower. Food is expensive enough as it is, I wouldn't want to think about how much it would cost at 25%

0% on most food and children's clothes, 5% on energy, 20% on almost everything else.

 

[Tommy Deaks]

Hold up. Am I going to get charged a further 20% from Skervesen, on top of their shipping charges?

EDIT - well not from Skervesen themselves, but 20% on top of what I have already paid for the guitar?

 

[asfeir]

Hold up. Am I going to get charged a further 20% from Skervesen, on top of their shipping charges?

EDIT - well not from Skervesen themselves, but 20% on top of what I have already paid for the guitar?

Well skervesen on their excel sheet give 2 prices, 1 of them is all taxes included and the other one is without the taxes. So logically you are going to pay the last one+20%

 

[IbanezDaemon]

Hold up. Am I going to get charged a further 20% from Skervesen, on top of their shipping charges?

EDIT - well not from Skervesen themselves, but 20% on top of what I have already paid for the guitar?

I've bought lots of guitars from other EU countries and never had to pay Vat or Importy Duty when they landed in the UK:

New Import Duty & Taxes Calculation | DutyCalculator

 

[blanco]

I've never paid customs duties or anything on guitars i've imported form the EU. I thought the idea of the EU trade bloc was to remove the customs duties to help increase trade and spending with other EU countries.

This might help clear some stuff up: HM Revenue & Customs: Customs Duty, Excise Duty and Import VAT: introduction

With regards to VIK being in Belarus and outside of the EU, i believe there is actually a deal that allows them to trade with the EU and UK at a discounted rate, but i can't remember the name of it or if its still in place. With the Strandberg* there would be no additional VAT because its between two EU countries, if its Strandberg* sweden that is rahter than Strandberg*/Washburn USA.

For us UK/EU guys a Washburn USA made Strandberg* could cost us nearly as much as a custom if we imported it ourselves, paying the additional customs duties because it's coming from america. So having an EU dealer makes it far cheaper. It can get really complicated as well if a business is manufacturing in one country but actually based and files tax in another.

Edit: That might not be right if it's shipped from Astral EXR. Not sure if there an american based company or swedish.

Also out of interest does your invoice/quote say "including VAT"?

 

[Winspear]

Yeah no costs at all on import. The comment about paying 20% to Strandberg himself has me confused? Though reading the VAT page it sounds like businesses earning over £79000 should be charging VAT. I'm guessing he might earn about that so maybe you do indeed pay him 20%. But either way - it wouldn't be paid when it lands. It would be included in the cost first stated I'm sure.