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Britain threatens to impose VAT and customs duties on EU imports if there is no Brexit deal 

By Christopher Hope, chief political correspondent 

 

Britain is threatening to introduce new laws to impose VAT and customs duties on all goods from the European Union if no Brexit deal can be agreed, the Government said today.

 

MPs and peers will legislate to impose new custom duties and VAT tariffs on trade with the EU in case no deal can be agreed by March 2019.

 

Full story: http://www.telegraph.co.uk/news/2017/08/15/britain-threatens-impose-vat-customs-duties-eu-imports-no-brexit/

 

-- THE TELEGRAPH 2017-08-16

[Orac]

Surely VAT is already paid on goods from the EU as companies are required to declare it on VAT returns rather than paying it at the border now and duties are the obvious consequence of leaving the single market without a trade deal.

 

 

[theguyfromanotherforum]

Go Brits!

[oldhippy]

13 minutes ago, Orac said:

Surely VAT is already paid on goods from the EU as companies are required to declare it on VAT returns rather than paying it at the border now and duties are the obvious consequence of leaving the single market without a trade deal.

 

 

No, that is not how the VAT system works.

 

When a British company imports goods from EU, they do not pay VAT on it.

[robblok]

A mouse roaring against the EU... Just look at the economic power of both blocks. With the pound sinking and its economic outlook bad I would not make too much troubles. 

 

 

[robblok]

3 minutes ago, oldhippy said:

No, that is not how the VAT system works.

 

When a British company imports goods from EU, they do not pay VAT on it.

 

Correct this is how it works they have to give their VAT nr to the seller and the seller would file a special vat form to explain the 0% vat. I made countless of these forms for clients (electronically).

 

Only Brit consumers pay vat on stuff from the EU (with some exceptions)

[oldhippy]

12 minutes ago, robblok said:

 

Correct this is how it works they have to give their VAT nr to the seller and the seller would file a special vat form to explain the 0% vat. I made countless of these forms for clients (electronically).

 

Only Brit consumers pay vat on stuff from the EU (with some exceptions)

Yes, this is one of the most ridiculous examples of EU tax rules.

 

If a British company buys a product in Britain, they have to pay VAT to the seller, but next they can claim the VAT back from the Britisch government.

If a British company buys a product in the EU, they do not have to pay VAT to the seller, but of course they can also NOT claim back from the British government.

 

The net result is neutral.

However, it implies that in first instance a company has to pay more for buying inland.

This was a "temporary" rule, introduced while waiting for VAT % and legislation to be harmonised in the entire EU.

 

What I do not understand is how the UK can threaten to introduce this VAT? If the UK leaves the EU, that silly VAT rule will end automaticaly.

As for import duties, yes sure, but the EU will levy them too.

 

Ridiculous threats by the UK!

 

 

Edited August 16, 2017 by oldhippy
spelling

[robblok]

12 minutes ago, oldhippy said:

Yes, this is one of the most ridiculous examples of EU tax rules.

 

If a British company buys a product in Britain, they have to pay VAT to the seller, but next they can claim the VAT back from the Britisch government.

If a British company buys a product in the EU, they do not have to pay VAT to the seller, but of course they can also NOT claim back from the British government.

 

The net result is neutral.

However, it implies that in first instance a company has to pay more for buying inland.

This was a "temporary" rule, introduced while waiting for VAT % and legislation to be harmonised in the entire EU.

 

What I do not understand is how the UK can threaten to introduce this VAT? If the UK leaves the EU, that silly VAT rule will end automaticaly.

As for import duties, yes sure, but the EU will levy them too.

 

Ridiculous threats by the UK!

 

 

This is how the VAT system works in other European countries. My clients don't look at what they have to pay because any business owner knows he can deduct the VAT again later on.  Its just too complicated to get VAT back from other countries, I am claiming some VAT back from the UK for a client, the acknowledge they received the data.. but it takes 3 months already to give the money back to the business. 

 

The seller did not want to make a invoice without VAT and now my client already waits 3 months .

 

Yes the moment they leave all VAT rules will change, now the latest thing is that electronic services are charged to consumers based on where they come from. So if your in the UK buying a VPN from a Dutch company (as a private person) you will be charged UK vat and the Dutch company pays that VAT to the UK (I hate that rule as its a lot of work) but it does mean countries can't compete on VAT tarif anymore.

[oldhippy]

Basically, the problem with this and other national, conflicting, complicated rules is that there are too many exceptions granted to some countries.

Simply put:

Problem is not too many EU rules, problem is not enough harmonisation of EU rules.

 

Hopefully, after the Brexit, the EU will no longer be allowing exceptions to narrow minded nationalistic member countries.

[Orac]

Yes, this is one of the most ridiculous examples of EU tax rules.
 
If a British company buys a product in Britain, they have to pay VAT to the seller, but next they can claim the VAT back from the Britisch government.
If a British company buys a product in the EU, they do not have to pay VAT to the seller, but of course they can also NOT claim back from the British government.
 
The net result is neutral.
However, it implies that in first instance a company has to pay more for buying inland.
This was a "temporary" rule, introduced while waiting for VAT % and legislation to be harmonised in the entire EU.
 
What I do not understand is how the UK can threaten to introduce this VAT? If the UK leaves the EU, that silly VAT rule will end automaticaly.
As for import duties, yes sure, but the EU will levy them too.
 
Ridiculous threats by the UK!
 
 

Surely this is just procedural with the nett effect being neutral for VAT registered companies whatever happens so, as you say, an empty threat, since VAT must be accounted for on all purchases anyway.

UK domestic purchases - UK VAT charged on invoice and reclaimed on VAT return.

EU purchases to UK - zero-rated on invoice (providing UK VAT reg number quoted) but requirement to account for VAT at UK rate on VAT return which is reclaimed on same return.

Non-EU purchases to UK - VAT paid at importation but reclaimed through VAT return.

The actual VAT cost is paid by the final consumer who is not VAT registered in all cases since they have no means to reclaim it.


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[oldhippy]

To Orac: Yes.

VAT is a consumer tax.

Companies "pay" VAT to their suppliers,  and bill VATto their customers (= other companies or consumers).

Companies normally receive more VAT from customers than they pay to their suppliers. They pay the difference to the government.

The original idea was that all companies would pay VAT to the EU government..... in reality they pay to their own government, which complicates the inner EU trade.

"Simple" solution: harmonise the different national VAT regulations. 

 

 

[baboon]

3 hours ago, oldhippy said:

Basically, the problem with this and other national, conflicting, complicated rules is that there are too many exceptions granted to some countries.

Simply put:

Problem is not too many EU rules, problem is not enough harmonisation of EU rules.

 

Hopefully, after the Brexit, the EU will no longer be allowing exceptions to narrow minded nationalistic member countries.

You might want to tell that to the Eastern European members who are refusing to take migrants...

[oldhippy]

Every country wants to be in (for the benefits) and out (19th century nationalism) at the same time.

[terryw]

The EU wants our money. No deal therefore no money. The EU likes bullying and making threats. Two can play that game.

 

Hopefully there are some sensible people in the EU who can see the benefits of a trade deal.

[jesimps]

I haven't seen any threats from the UK, this as everyone knows, is a consequence on both sides, if there's no deal.

 

Fake news and scaremongering and the remoaners and non-Brits leap on it of course.

 

 

[Baerboxer]

6 hours ago, robblok said:

A mouse roaring against the EU... Just look at the economic power of both blocks. With the pound sinking and its economic outlook bad I would not make too much troubles. 

 

 

 

What would you do then? Simply give into the bullying demanding tactics Barnier is adopting? That's what he was chosen for of course.

 

Sad day when Britain ludicrously decided to leave based on complete <deleted> from politicians. However, unless that decision is reversed then they have to negotiate or simply roll over and allow the lunatic vengeance seeking elements in the EU to shaft them.

 

Will be an even sadder day if the EU project does implode - as without Britain to defend them, some countries will get walked all over. Not the fast track ones of course!

[kamahele]

I'm assuming this will be a situation where the EU will respond in kind to any move that the UK makes in this regard

[ilostmypassword]

5 minutes ago, Baerboxer said:

 

What would you do then? Simply give into the bullying demanding tactics Barnier is adopting? That's what he was chosen for of course.

 

Sad day when Britain ludicrously decided to leave based on complete <deleted> from politicians. However, unless that decision is reversed then they have to negotiate or simply roll over and allow the lunatic vengeance seeking elements in the EU to shaft them.

 

Will be an even sadder day if the EU project does implode - as without Britain to defend them, some countries will get walked all over. Not the fast track ones of course!

Which countries would those be?

[Enoon]

 

Will Britain triumph where Napoleon failed, and successfully impose the Continental System upon itself?:

 

Continental System - Wikipedia

 

 

 

Edited August 16, 2017 by Enoon

[dunroaming]

Great threat!  If we don't reach a deal then all Brits are going to have pay more for goods from the EU.  Really good news for the consumers in the UK.  The stupidity is mind blowing!  

[Grouse]

10 minutes ago, dunroaming said:

The stupidity is mind blowing!  

Correct! 

[oldhippy]

21 minutes ago, dunroaming said:

Great threat!  If we don't reach a deal then all Brits are going to have pay more for goods from the EU.  Really good news for the consumers in the UK.  The stupidity is mind blowing!  

On the other hand, the British consumer will be able to buy cheap Parma ham made in Cardiff, Roquefort from Liverpool, Belgian chocolate from Londonderry, etc.

 

[dunroaming]

2 minutes ago, oldhippy said:

On the other hand, the British consumer will be able to buy cheap Parma ham made in Cardiff, Roquefort from Liverpool, Belgian chocolate from Londonderry, etc.

 

No doubt they will but wait!  Does anyone believe that the British suppliers won't increase their prices into line with their European competitors?  Please tell me this is all a nightmare and I will wake up soon.

[retarius]

I have been expecting this for some time. All the scaremongering assumed that the EU would levy duties on UK goods but we would leave the EU exporters to come into the UK free. Finally our negotiators seem to have found that two can play at the threats of duties game.

[oldhippy]

5 minutes ago, retarius said:

I have been expecting this for some time. All the scaremongering assumed that the EU would levy duties on UK goods but we would leave the EU exporters to come into the UK free. Finally our negotiators seem to have found that two can play at the threats of duties game.

555

The scaremongers that assumed etc...... exist only in your imagination.

[Belzybob]

Its all old news and scaremongering. Before the Irish joined the EU fortunes were made from VAT by running goods and livestock back and forth over the Eire/NI border. The EC is a white elephant run by a group with their heads so far up their self important ar*es that they cannot see daylight. Lets hope what the Brits started will spread like a wildfire across Europe.

[Grouse]

20 minutes ago, oldhippy said:

On the other hand, the British consumer will be able to buy cheap Parma ham made in Cardiff, Roquefort from Liverpool, Belgian chocolate from Londonderry, etc.

 

Brexiters don't like foreign muck!

 

 

Edited August 16, 2017 by Grouse

[Jonnapat]

8 hours ago, oldhippy said:

Yes, this is one of the most ridiculous examples of EU tax rules.

 

If a British company buys a product in Britain, they have to pay VAT to the seller, but next they can claim the VAT back from the Britisch government.

If a British company buys a product in the EU, they do not have to pay VAT to the seller, but of course they can also NOT claim back from the British government.

 

The net result is neutral.

However, it implies that in first instance a company has to pay more for buying inland.

This was a "temporary" rule, introduced while waiting for VAT % and legislation to be harmonised in the entire EU.

 

What I do not understand is how the UK can threaten to introduce this VAT? If the UK leaves the EU, that silly VAT rule will end automaticaly.

As for import duties, yes sure, but the EU will levy them too.

 

Ridiculous threats by the UK!

 

 

Blame the idiots who are supposed to be in charge of these negotiations.

Totally clueless in every respect .

[oldhippy]

5 minutes ago, Belzybob said:

Its all old news and scaremongering. Before the Irish joined the EU fortunes were made from VAT by running goods and livestock back and forth over the Eire/NI border. The EC is a white elephant run by a group with their heads so far up their self important ar*es that they cannot see daylight. Lets hope what the Brits started will spread like a wildfire across Europe.

I share your hope......

We need the EU to set rules.

Join us 100% or exit.

No more exceptions to the rules.

A smaller but more united Europe, with 1 government, 1 currency, 1 foreign policy, 1 tax system.

All the problems started when we admitted the UK and allowed them all kinds of exceptions.

 

I am not an admirer of general de Gaulle, but when he originally said "NON" to the UK, he was right!

[oldhippy]

24 minutes ago, Belzybob said:

Its all old news and scaremongering. Before the Irish joined the EU fortunes were made from VAT by running goods and livestock back and forth over the Eire/NI border. The EC is a white elephant run by a group with their heads so far up their self important ar*es that they cannot see daylight. Lets hope what the Brits started will spread like a wildfire across Europe.

Yes, VAT scams between Ireland and UK (Northern Ireland), but only in your imagination!

 

In reality, the UK and Ireland (and Denmark) joined the EU at the same day, 1 january 1973.