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    1. AlexL is offline

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      #1

      UK VAT for non EU buyers - Reimporting goods purchased within the EU

      I've been trying to find an answer for this.

      I've contacted a U.K based supplier that gave me prices for used cell phones (phones are not made in the U.K). The prices are VAT inclusive, but from what he says since I am not in the U.K I am not supposed to pay VAT. I am exporting them to Israel so I can inspect them. After that I'll sell them to customers in the U.K.

      Question is:

      1. How is it decided if I need to pay VAT?

      2. Will the customer will be charged any taxes by the customs?

      3. What if I ask him to ship the goods to a storage inside the U.K. Will I need to pay VAT in that case?

      4. Also what is the VAT percentage for used/refurbished cell phones?

      Thank you.
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    2. WholesaleMod's Avatar
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      #2
      Hi Alex,

      If you are buying the goods as an Israel business, and storing them within a UK warehouse on behalf of your Israel business, then yes you would still have to pay VAT.

      If however you are exporting them to Israel, you would still be exempt from paying VAT to your supplier, however when the goods re-enter the EU to reach your customers, your customers will be liable to pay the VAT and duties on import.

      UK VAT must be paid by UK businesses, or by EU entities that do not hold a valid EU VAT number. All entities based outside the EU are not required to pay VAT on goods purchased within the EU.

      Another option is to use a UK bonded warehouse, which is a special kind of warehouse for goods which aren't meant for sale within the UK or EU, but need to be stored within the UK territory for logistical convenience. Bonded warehouses are beneficial mostly when importing goods from outside the EU into the UK, but when those goods aren't meant for sale within the UK or EU.

      UK VAT is 20% at this point in time.

      Hope this helps
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    3. AlexL is offline

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      #3

      Quote:

      Originally Posted by WholesaleMod View Post
      Hi Alex,

      If you are buying the goods as an Israel business, and storing them within a UK warehouse on behalf of your Israel business, then yes you would still have to pay VAT.

      If however you are exporting them to Israel, you would still be exempt from paying VAT to your supplier, however when the goods re-enter the EU to reach your customers, your customers will be liable to pay the VAT and duties on import.

      UK VAT must be paid by UK businesses, or by EU entities that do not hold a valid EU VAT number. All entities based outside the EU are not required to pay VAT on goods purchased within the EU.

      Another option is to use a UK bonded warehouse, which is a special kind of warehouse for goods which aren't meant for sale within the UK or EU, but need to be stored within the UK territory for logistical convenience. Bonded warehouses are beneficial mostly when importing goods from outside the EU into the UK, but when those goods aren't meant for sale within the UK or EU.

      UK VAT is 20% at this point in time.

      Hope this helps
      Thank and let's see if I understand this right.

      If I am buying the goods as an Israeli registered business that sells online, and the supplier gave me VAT inclusive prices for used smartphones, even if they are shipped and stored inside the U.K. I need to deduct 20% percent from the price I need to pay him right?

      After that if I am to sell the phones inside the U.K I might need to charge the customer VAT. But how can I transfer VAT to U.K authorities if I am not EU business? Or you mean I might need to pay VAT here in Israel?

      Also are there good companies inside the U.K that can store, sort, pack and ship the goods to customers? Something like shipwire?

    4. WholesaleMod's Avatar
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      #4

      Quote:

      Originally Posted by AlexL View Post
      If I am buying the goods as an Israeli registered business that sells online, and the supplier gave me VAT inclusive prices for used smartphones, even if they are shipped and stored inside the U.K. I need to deduct 20% percent from the price I need to pay him right?
      Only if your supplier is shipping them to a UK bonded warehouse.

      Quote:

      Originally Posted by AlexL View Post
      After that if I am to sell the phones inside the U.K I might need to charge the customer VAT.
      You will be required to pay VAT to UK HMRC.

      Quote:

      Originally Posted by AlexL View Post
      But how can I transfer VAT to U.K authorities if I am not EU business? Or you mean I might need to pay VAT here in Israel?
      The fulfillment company holding the stock on behalf of a foreign business entity will be able to assist with this issue. It's where the goods are stored and destined to that determines to whom VAT should be paid.

      Quote:

      Originally Posted by AlexL View Post
      Also are there good companies inside the U.K that can store, sort, pack and ship the goods to customers? Something like shipwire?
      Yes there are many and it's a growing sector. Amazon offers fulfillment services, also shipwire has UK warehouses. You should look up fulfillment companies to compare services.

      Hope this helps

    5. Thank you for this post:

      AlexL (19 Apr 2012)

    6. AlexL is offline

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      #5
      Ye, that helps thanks for the help.

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