VAT on UK purchases

McWotever

Was on a UK (well NI) based website looking to buy a bicycle helmet last week. I noticed the price between selling it to UK customers and ROI customers was different. I challenged the company on this and they said because it was safety equipment, the UK do not charge VAT, but because they were selling to and dispatching to an ROI address VAT is applied.

Now I cant argue that VAT is charged in ROI and not the UK as ROI wouldn't dream of discounting safety equipment, but that is not my issue.

The issue is this. My understanding of sales is that I am ordering off a UK company, the transaction takes place in the UK (albeit virtually), where VAT is not charged. Given free trade between EU countries, whey should they apply VAT to ROI customers?

For example play.com's DVD's are priced cheaply because they are based in VAT free Jersey, and do not charge VAT to ROI customers.

Am I wrong in my thinking, or is this company either A; playing it too cautiously or B; pocketing an extra 21.5% as a Paddy tax?

McW

As an after thought, I think Jersey is actually outside the EU, maybe that has something to do with it?

CH3OH

Queried Amazon recently on why they wouldn't ship a cycle helmet and was told that safety equipment is vat exempt in the UK and that it was too problematic to adjust their prices.

Once an EU overseas company exceeds the threshold for sale into Ireland, the revenue expect them to charge Irish VAT (and send us the money!)

http://www.revenue.ie/en/tax/vat/leaflets/distance-sales-eu.html

McWotever

Bit hard to read, but think you're on the money there (pun intended). Finance will get ye everyway. My only hope now is to campaign against VAT on bicycle helmets!

leeroybrown

As mentioned above the distance sales legislation require companies to charge Irish VAT if they're going to exceed the €35,000 limit in a year. Most large online retailers will correctly apply the VAT.

With regard to Play.com, I'm not sure what the current situation is but they were part of a long running tax dispute with the Revenue. As far as the Revenue are concerned if you buy items from them Irish VAT is due if they're stopped by Customs.

mdebets

leeroybrown wrote: »

With regard to Play.com, I'm not sure what the current situation is but they were part of a long running tax dispute with the Revenue. As far as the Revenue are concerned if you buy items from them Irish VAT is due if they're stopped by Customs.

Why was there a dispute? I thought it was very clear. Jersey is outside the EU, therefore VAT and Duty needs to be paid for everything bought from there.

leeroybrown

mdebets wrote: »

Why was there a dispute? I thought it was very clear. Jersey is outside the EU, therefore VAT and Duty needs to be paid for everything bought from there.

It started a good few years ago. I'm sketchy on the exact details but I think it was due to Play.com doing a VAT deal with HMRC at the time but refusing to do similar with the Revenue here. In turn the Revenue told Customs to impound every single package that looked like it came from Play.com and ruined Christmas for a lot of people due to the huge time it took to assess whether items could be VAT exempt as a 'low value' item.

ejmaztec

I remember that there was a lot of hoohah because UK companies were getting round the vat regulations by shipping goods to their "address" in Channel Islands, then shipping them to customers vat-free.

The tax authorities in the CI, probably after a bit of pressure from London, pretty much forced these UK companies to charge UK vat on anything that went to the UK.

Perhaps the Irish authorities couldn't make the same arrangement because the companies involved were basically UK companies, and not Irish?

blorg

@OP- you should be able to find another UK website with sales under the threshold* to get your helmet VAT-free. AFAIK CRC and Wiggle are the only UK cycle retailers to charge Irish VAT... both were certainly over the sales threshold for many years before they made the required change. Off the top of my head McConvey and Slane Cycles are both in NI and charge UK VAT to ROI customers.

*or indeed one which is just not complying with the requirement.

TheInquisitor

The limit on Vat exemption from abroad is £15 . (Reduced recently from £18). If the price of the item is above this then VAT must be applied

blorg

Note abroad in that context means outside the EU, you do not have to pay VAT to customs if buying from within the EU (Jersey is outside the EU but the UK is not.)