Advice on selling to EU countries

pramsandstuff

I was hoping for a little advice on Exporting if anyone could be so kind.

I run a small online Pushchair/Pram/Car Seat business here in the UK. At the moment we only ship to the UK and I was considering expanding to selling in Europe.

I am trying to figure out what duties and taxes will be liable on orders shipped to customers in Europe so I can figure out if this is a viable option.

From what I can gather from the HMRC website I would not need to charge VAT as long as I can prove that the orders were indeed shipped abroad. What is less clear is what taxes and duties I would have to pay to the countries in which I am shipping the goods to. 

For example If someone in France went on our site and ordered a pram for £1000, how much tax and import/export duty would I have to pay and to whom? 

Any advice would be greatly appreciated. Many thanks in advance.

El_Torro

I don't run my own business but the company I work for does send a lot of stock around Europe (in and out of the UK). 

The UK currently has a free trade agreement with the EU. This means that there are no duties to pay, either  exporting from the UK to the EU or importing to the UK from the EU. Essentially the cost is the same as when we were part of the EU. Customs can be a pain (both importing and exporting) but as long as everything is done correctly you shouldn't expect your customers in the EU to pay any duties.

VAT is a different matter and I think you have the wrong idea here. Just because we're in a free trade agreement this doesn't mean that you can get away with not charging VAT. A quick Google tells me that your customer is only exempt from paying VAT if they are VAT registered. i.e. a business to business transaction. Presumably VAT would have to be recovered somewhere in this case, most likely in the country you have shipped to when your customer sells the product on to their customer. 


The company I work for has certainly had a lot of pain since Brexit in trying to get stock to places in a timely manner. For sure a lot of the pain has been people adjusting to the increased Customs checks. It doesn't help that sometimes goods will be shipped with no issue and then a few weeks later a similar transaction is done and Customs in the receiving country ask for things that are different to what they asked for last time. 

pramsandstuff

El_Torro said:

I don't run my own business but the company I work for does send a lot of stock around Europe (in and out of the UK). 

The UK currently has a free trade agreement with the EU. This means that there are no duties to pay, either  exporting from the UK to the EU or importing to the UK from the EU. Essentially the cost is the same as when we were part of the EU. Customs can be a pain (both importing and exporting) but as long as everything is done correctly you shouldn't expect your customers in the EU to pay any duties.

VAT is a different matter and I think you have the wrong idea here. Just because we're in a free trade agreement this doesn't mean that you can get away with not charging VAT. A quick Google tells me that your customer is only exempt from paying VAT if they are VAT registered. i.e. a business to business transaction. Presumably VAT would have to be recovered somewhere in this case, most likely in the country you have shipped to when your customer sells the product on to their customer. 


The company I work for has certainly had a lot of pain since Brexit in trying to get stock to places in a timely manner. For sure a lot of the pain has been people adjusting to the increased Customs checks. It doesn't help that sometimes goods will be shipped with no issue and then a few weeks later a similar transaction is done and Customs in the receiving country ask for things that are different to what they asked for last time. 

Thank you for your helpful informative reply. I will have to do some more digging on the VAT situation. My assumption on the matter came from the following section on the gov.uk website. I understand it that you don't charge VAT to any sales that are being exported unless you are in Northern Ireland then you still have to charge VAT to EU customers. 

El_Torro

I'm not very familiar with rules around VAT, the little exposure I've had at my company regarding imports / exports has all been business to business. What you are quoting makes sense though, since Northern Ireland is still kind of inside the EU (not really, but sort of). 

Some further quick Googling comes up with conflicting information. I have found the gov.uk page you are quoting, though looking elsewhere suggests that you (the seller) are responsible for the VAT and you have to charge it. Hopefully someone more knowledgeable than me can give you more advice on this subject.

DullGreyGuy

pramsandstuff said:

El_Torro said:

I don't run my own business but the company I work for does send a lot of stock around Europe (in and out of the UK). 

The UK currently has a free trade agreement with the EU. This means that there are no duties to pay, either  exporting from the UK to the EU or importing to the UK from the EU. Essentially the cost is the same as when we were part of the EU. Customs can be a pain (both importing and exporting) but as long as everything is done correctly you shouldn't expect your customers in the EU to pay any duties.

VAT is a different matter and I think you have the wrong idea here. Just because we're in a free trade agreement this doesn't mean that you can get away with not charging VAT. A quick Google tells me that your customer is only exempt from paying VAT if they are VAT registered. i.e. a business to business transaction. Presumably VAT would have to be recovered somewhere in this case, most likely in the country you have shipped to when your customer sells the product on to their customer. 


The company I work for has certainly had a lot of pain since Brexit in trying to get stock to places in a timely manner. For sure a lot of the pain has been people adjusting to the increased Customs checks. It doesn't help that sometimes goods will be shipped with no issue and then a few weeks later a similar transaction is done and Customs in the receiving country ask for things that are different to what they asked for last time. 

Thank you for your helpful informative reply. I will have to do some more digging on the VAT situation. My assumption on the matter came from the following section on the gov.uk website. I understand it that you don't charge VAT to any sales that are being exported unless you are in Northern Ireland then you still have to charge VAT to EU customers. 

The paragraph under the bullets is important... technically you do charge VAT at 0% meaning you can still recover the input VAT -v- something that is VAT Exempt which you cannot recover VAT on your input. 

As you see the items are £1,000 then it is the importers issue on what local VAT and Duty they may have to pay in the EU. If you were selling much cheaper policy then, like the UK, you may have to charge the local VAT yourself. 

The "problem" with this is that the customer gets hit with a big bill for importing goods from the UK... most companies shrug and say its the importers problem and its in the FAQ on your website. The alternative is to give customers the option to pay an increased price and you cover the importation costs. Many courier firms offer this option but may require you to have a minimum export quantity for you to be able to access it... they have APIs so your website can adjust the price appropriately depending on the buyers location. 

You'd need to speak to specialists on if there are any particular complexities with the type of products you are exporting for a smooth transition through customs at the other end. Clearly the press was full of horror stories post-brexit of companies having to complete vast amounts of paperwork to have their products allowed in.

Not sure if you are in NI or if that was an unhelp diversion... everything there is very different. 

martindow

I think your reading of the VAT is correct @pramsandstuff.  The B2B arrangements @El_Torro mentions are those that applied pre-brexit.

Some carriers offer DDP (Delivered Duty Paid) where the sender pays the delivery country's VAT and handling fees.  This means you can quote an all in price to a prospective customer and they will not be presented with a bill on arrival.  The problem is that not all carriers offer this service and that, as VAT rates vary from country to country, there will be different sums to pay in each of the 27 countries.  I have used this service via Parcel2go using I think DPD although DPD directly didn't seem to offer it.

https://www.parcel2go.com/international-shipping-hub/Consumer/import-tax-ddp-ddu

Your other issue is that prams are large and heavy when boxed up.  As soon as you get outside certain dimensions, prices jump up a lot, but you may be able to negotiate with carriers to get better rates if you are going to be sending regularly.

I think I would contact the sales departments of some companies directly to see what they can offer.

penners324

Standard pla e of supply rules are if you're selling to a foreign company then no VAT chargeable. If you're selling to foreign individuals then UK VAT is chargeable.

You may also need to pay VAT in the EU country they're based....

martindow

penners324 said:

Standard pla e of supply rules are if you're selling to a foreign company then no VAT chargeable. If you're selling to foreign individuals then UK VAT is chargeable.

You may also need to pay VAT in the EU country they're based....

Are you sure that this is correct?  It's a while since I was involved with VAT, but it certainly used to be the case that no VAT was charged on exports whether to individuals or companies.

penners324

martindow said:

penners324 said:

Standard pla e of supply rules are if you're selling to a foreign company then no VAT chargeable. If you're selling to foreign individuals then UK VAT is chargeable.

You may also need to pay VAT in the EU country they're based....

Are you sure that this is correct?  It's a while since I was involved with VAT, but it certainly used to be the case that no VAT was charged on exports whether to individuals or companies.

Yes, it is correct and has been for many years 

MattMattMattUK

El_Torro said:

The UK currently has a free trade agreement with the EU. This means that there are no duties to pay, either  exporting from the UK to the EU or importing to the UK from the EU. Essentially the cost is the same as when we were part of the EU. Customs can be a pain (both importing and exporting) but as long as everything is done correctly you shouldn't expect your customers in the EU to pay any duties.

This is incorrect, duty is charged based on the country of origin of the goods, not the country the goods are shipped from. If the widget is manufactured in the UK then no duty is due when exporting to the EU, however if the widget was originally imported from China, the exported to the EU duty would be due. Where this gets even more complicated is widgets made from components from China but built in the UK, or items modified/decorated/finished in the UK, that still remains substantially unresolved and is largely down to customs in the receiving country to interpret, see issues with cars requiring special regulations. 

martindow

penners324 said:

martindow said:

penners324 said:

Standard pla e of supply rules are if you're selling to a foreign company then no VAT chargeable. If you're selling to foreign individuals then UK VAT is chargeable.

You may also need to pay VAT in the EU country they're based....

Are you sure that this is correct?  It's a while since I was involved with VAT, but it certainly used to be the case that no VAT was charged on exports whether to individuals or companies.

Yes, it is correct and has been for many years 

I was last involved with VAT about twenty years ago and if we were selling to the US for example we did not add VAT whether selling to individuals or companies.  For the EU we charged no VAT to businesses who had provided their local VAT number, but we did charge individuals. 

We had a VAT inspection and I am sure they were happy with us not charging VAT on exports to countries outside the EU.

I assumed that since brexit  the EU would now be treated along with other countries regarding exports.  Isn't an individual in France, say, going to be charged French VAT on arrival?  This would leave them paying both UK and French VAT which doesn't seem conducive to encouraging exports.