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Worried about Brexit VAT?

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Graham Slee View Drop Down
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Joined: 11 Jan 2008
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    Posted: 21 Nov 2020 at 4:21am
Get ready! For what? (does anybody actually know?)

Although Brexit happened a year ago, the European VAT (sales tax) doesn't change until January 1st 2021.

On January 1st, our European customers will not pay us VAT anymore, so our price to them will be the same as to the rest of the world - that's 20% less, but, wait for it...

VAT is so funny. Say the price was 100 Pound sterling, and so 20% VAT makes it 120 Pound sterling; how do you take off 20%?

You could multiply it by 0.8, but then it would be 96 Pound sterling. Wouldn't that be great?

Or, you could divide it by 1.2, and you'd get the real answer of 100 Pound sterling. We know a rhyme about that.

Polly put the V-A-T on, ... Sukey took it off again, ... then (48 years later) the VAT went away.

That was the easy part, and I'm sure savvy European customers already know that. But what worries them (you/him/her/it) most is being charged VAT twice if they order and pay for something before midnight on December 31st but don't receive it until the new year.

We will use the pre-January-1st order date as the date and tax point of sale, which cannot be argued with. The COMMERCIAL INVOICE / SALES INVOICE accompanying the parcel will show that VAT has been paid. The package will also have a sticker on it to alert customs agents to the fact.

At 00:01 hours, January 1st, we hope to have switched over the automatic EU VAT charge on our online shop to zero VAT ...

The Internet will most probably crash with thousands of UK online shops doing it at the same time, but I'm sure it will add to the fun!

... and from then the COMMERCIAL INVOICE / SALES INVOICE will show customs agents that the parcel shipped from outside the EU with no VAT charge.

Rather than merely receiving the parcel as in the past, European customers will most likely receive a card, asking for payment of VAT at their own country's rate before the package can be delivered.

However, as avid Brexit "free trade deal" watchers will know, it might all change at the 11th hour. It looks as if Barnier and Frost are going to keep the suspense going right to the end.

Best wishes,
Graham
Not simple enough for Google-Bot to understand...
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