Set up BREXIT UK Threshold 135 Pound for Products coming from the EU

Mr-Flo
Explorer
61 8 28

Good Day,

has someone found a solution to only tax UK buyers if their order volume is lower than 135 Pounds (Like 150€)?

Example:

1. UK - Bob buys 1 Jeans: 125€ / below 135 Pounds --> He pays tax within my store (20%) and I ship it to UK with my UK VAT & EORI. (SO he pays: 125 inclusive 20% VAT)

2. UK - Bob buys 2 Jeans: 250€ / above 135 Pounds --> He does not pay tax in my store ( 250 -> Tax deduct 209€ he pays) --> and Tax it on his own behalf when the post man rings. (So he pays 209€ exclusive VAT = EXPORT)

 

THX

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BiancaBlake
Tourist
18 0 2

Well you can charge him VAT when he buys two pairs of jeans. And report every sales both below and above 135 to HMRC. That way it is always included for them. Does that make sense? Bianca at Euro VAT Refund

-If your sale is above £135 GBP:

Goods above this value are subject to import VAT and duty at customs. No new change to this rule, but the tricky part now becomes to keep track of currency exchange rates at each time of sale. For example, if your product price is $180 USD some days you might be above £135 GBP and other days below. The £135 threshold is based on the intrinsic value of the goods, excluding transport, insurance and other import taxes.

If your imported goods are valued above £135 (or multiple goods with a combined intrinsic value above £135) then you as a U.S. seller still have the option to make your customers pay for VAT to customs. In other words, when you sell the product you inform your customer that they are responsible for importing the goods and have to pay duty + 20% VAT to customs.

Another option, would be for your company to register for a UK VAT number and pay duty and 20% import VAT. This is reported quarterly to the UK and you receive a refund for the import VAT. Either way, it is advisable for companies with large quantities of sales to be registered for VAT in the UK and pay the import VAT (and duties) to customs. That way your customers will not receive an additional payment requirement upon delivery.

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Mr-Flo
Explorer
61 8 28

hi @BiancaBlake 

I am EU Based, as far as I know, I can charge VAT, to the UK now if the order is above 135 Pounds. But I am not obligated to. 

If below 135 I am more or less obligated. 

 

My Q. was; How to set up when the Customer pays X Amount in € (adjustable to € - Pound convergency) to Include VAT 20% at checkout, but if the Order Value (Items only) are above 135, deduct 20% Vat. (All my prices are with VAT)

 

Also, what happens if the value is above 135 Pound and I charge VAT, what I give to HMRC, who pays (duty) at Customs? 

 

If your imported goods are valued above £135 (or multiple goods with a combined intrinsic value above £135) then you as a U.S. seller still have the option to make your customers pay for VAT to customs. In other words, when you sell the product you inform your customer that they are responsible for importing the goods and have to pay duty + 20% VAT to customs.

That makes no sense, You already include VAT in price (you can if above 135), why should they double pay VAT? Or am I reading wrong?

Maybe you mix something up, or I do so. Because on the Duty amount you also pay VAT. So you have 3 payments in Total: 

1. Item + 20% VAT

2. Duty + 20% Vat

or

1. Item + 0% VAT

2. Duty + 0%VAT

3. (Item + Duty) x 1.2 (20% VAT)

 

 

To make It short: Shopify can not do it, right?

I have to charge VAT below 135 Pounds.

Above 135 Pounds I can charge only VAT or Vat and Duty? (The first case, the customer only pays duty at delivery, right?)

 

Best

 

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