Customs tax question post-brexit

[kozuki]

Hello everyone,
since brexit is now in place and UK is not in the EU anymore, I have to pay VAT (was buying with VAT exempt from EU), which is understandable, but now I just realised that customs might take this parcel and if the value of the PC is written in the documents somewhere, they could impose some pretty big import tax on top of everything. Did anyone from outside the UK receive their builds recently (post-brexit) and/or does anyone know how PCS deal with that? If I have to pay import tax on top of the VAT, unfortunately it might be absolutely not worth anymore sadly and I would have to refund, even after waiting for so long.
thanks

 

[SpyderTracks]

Hello everyone,
since brexit is now in place and UK is not in the EU anymore, I have to pay VAT (was buying with VAT exempt from EU), which is understandable, but now I just realised that customs might take this parcel and if the value of the PC is written in the documents somewhere, they could impose some pretty big import tax on top of everything. Did anyone from outside the UK receive their builds recently (post-brexit) and/or does anyone know how PCS deal with that? If I have to pay import tax on top of the VAT, unfortunately it might be absolutely not worth anymore sadly and I would have to refund, even after waiting for so long.
thanks

I thought you'd paid for yours ages ago? Or is this for a new build?

Anyway, you'd need to speak to PCS directly.

 

[kozuki]

I thought you'd paid for yours ages ago? Or is this for a new build?

Anyway, you'd need to speak to PCS directly.

I did, my PC was paid fully, all amendments paid too instantly, but now they said that I would need to pay the VAT too. I thought usually the terms and conditions apply at the time of buying, not at the time of shipping of the product, so it's a weird one for me.

 

[SpyderTracks]

I did, my PC was paid fully, all amendments paid too instantly, but now they said that I would need to pay the VAT too. I thought usually the terms and conditions apply at the time of buying, not at the time of shipping of the product, so it's a weird one for me.

They do, I wouldn't accept that personally, you've settled the financial agreement, it can't be reevaluated.

That's not coming from any actual knowledge, that's just what I would have assumed based on any financial agreement I've ever made.

 

[SpyderTracks]

There was this thread posted recently, may give some guidance...

Brexit and VAT

Since I live in Ireland, I was wondering how the VAT on orders from within the EU would be taken care of with the post-Brexit situation.

www.pcspecialist.co.uk

 

[kozuki]

They do, I wouldn't accept that personally, you've settled the financial agreement, it can't be reevaluated.

That's not coming from any actual knowledge, that's just what I would have assumed based on any financial agreement I've ever made.

The terms and conditions do say that they're not responsible for any customs taxes that may apply during delivery, but it doesn't say anything about VAT. I will need to email them, both about the VAT and the customs, though I'm waiting for an answer to an email about that already. All payments were made before 2021, so while UK was in the EU and with the VAT exempt.

 

[SpyderTracks]

The terms and conditions do say that they're not responsible for any customs taxes that may apply during delivery, but it doesn't say anything about VAT. I will need to email them, both about the VAT and the customs, though I'm waiting for an answer to an email about that already. All payments were made before 2021, so while UK was in the EU and with the VAT exempt.

The import tax, I could understand, think that's unavoidable with Brexit.

The VAT though, if you were valid excluded before Brexit, I don't see why that should suddenly change, you've settled the agreement in full, so any amendments afterwards do not apply. That's my understanding anyway, I'm not a financial guy, I know very little about finance, but from a long term capitalist nutter who buys everything he can get his hands on, that's my understanding.

I would avoid email, PCS have said that there's a huge backlog and responses are taking about a week.

 

[SpyderTracks]

Just furthermore, your receipt is proof that the financial agreement was settled to their terms. That is the legal document that states that the transaction was settled satisfactorily.

 

[kozuki]

The import tax, I could understand, think that's unavoidable with Brexit.

The VAT though, if you were valid excluded before Brexit, I don't see why that should suddenly change, you've settled the agreement in full, so any amendments afterwards do not apply. That's my understanding anyway, I'm not a financial guy, I know very little about finance, but from a long term capitalist nutter who buys everything he can get his hands on, that's my understanding.

I would avoid email, PCS have said that there's a huge backlog and responses are taking about a week.

Just furthermore, your receipt is proof that the financial agreement was settled to their terms. That is the legal document that states that the transaction was settled satisfactorily.

They have emailed me directly, so I'm emailing with a specific person, hopefully they can reply faster, I cannot afford and have no time for international calls at this moment. I am still waiting for the PC to go into build anyway. I would accept to pay the VAT if PCS confirmed that they would get the machine through the customs without additional taxes or would take care of them from their side, however it is still unclear to me how they just concluded that my sale is now "no longer valid" (direct quote from the email) just because they left the EU. Even so, if they knew that something like this would happen, the UK knew that brexit was going to happen for a long time now, they could have warned customers about this much earlier and with clear pointers as of why this is happening.

 

[kozuki]

I would seriously question the VAT anyway....there shouldn't be any need to pay it. I quote this directly from the Government (last amended 31st December so, presumably, updated for Brexit):

"If you sell, send or transfer goods out of the UK you do not normally need to charge VAT on them. You can zero rate most exports from:

• Great Britain to any destination outside the UK
• Northern Ireland to a destination outside the UK and EU"

Here it is in it's original format and location:

Exports, sending goods abroad and charging VAT

Find out if VAT is due when you sell, send or transfer goods from Great Britain to outside the UK or from Northern Ireland to outside the UK and EU.

www.gov.uk

I wonder if the VAT thing is covering Import/Export taxes maybe?

Also this from same page:

"VAT is a tax on goods used in the UK"

Just called the local customs office and consulted with them, apparently the import tax rate for computers is 0%, however, for all imports from 3rd countries (which UK is now post-brexit), I have to pay local VAT (21%) and the VAT from UK shouldn't be really counted in, the consultant didn't know exactly, but she said she's pretty sure the UK shouldn't ask for VAT, especially if the purchase was made by a company that is applicable for VAT exempt. All in all, with the information you have posted too, I am pretty sure PCS shouldn't ask for VAT, as that would only benefit them, and I would have to pay 21% on top of the final sum anyway, so I doubt they can arrange the customs import VAT to be paid with that, as that is something I need to declare myself with local forms sent to the customs office here. Looks like PCS either want to make more money or that was a serious miscommunication by the accounting.
I would be fine with everything if I only had to pay VAT here, when the PC reaches the border, but worst case scenario I would be ready to cancel my order for a full refund as there are mainland Europe sellers who could build a super similar specification for the same price basically and would be fully VAT exempt as it would be within the EU. Sure PCS would cost me more in the end with the extra import VAT, but I am willing to pay that just because I'm currently on 68 working days wait and would have wasted 3 months of my time and also I do want to believe that PCS build quality is worth it.

 

[kozuki]

The best way to work out whether it's the UK VAT or they are including your Import VAT into the price is to work out exactly how much VAT is involved:

If it is 20% then it is the UK VAT (that is our current rate);

If it is 21%, then it seems it's your Import VAT

I am yet to get a response from Monday, but I will have to ask for a fully detailed clarification if they demand the VAT payment. The most outrageous thing is that they simply declared that the sale is no longer valid with no explanation apart from "the UK is not in the EU anymore"

 

[Xtie]

 

[Xtie]

The above is the response I received in Dec.

16 days after dispatch, my pc is still stuck in Stansted. So I have no idea yet.

@GRABibus you received your pc recently. Are you based out of EU? If so, was there any complication or additional charges?

 

[kozuki]

The above is the response I received in Dec.

16 days after dispatch, my pc is still stuck in Stansted. So I have no idea yet.

@GRABibus you received your pc recently. Are you based out of EU? If so, was there any complication or additional charges?

interesting, the thing is that as Spyder said, I entered the financial agreement with VAT exempt before all brexit things, with no information or warnings that this could happen post-brexit, so in theory I have paid fully for my order and why would I need to pay extra with no warning. Are they asking for VAT so they can cover the import fee? That would make sense, but it would still be extra payment from me that I was not warned about and terms and conditions have nothing written about that too.

 

[kozuki]

I paid fully as a customer, doesn't matter if I am buying as an individual or as a company, now it is only a matter of delivery, doesn't make any sense for me to pay huge extras with no warning, this should be PCS's issue of delivering the product to me and it's their own fault for not telling me or anyone that this would happen for an order that isn't dispatched before brexit happens. They can't just ask me to pay up all the taxes and VAT now with only stating that they're not part of EU.

 

[Xtie]

To put that screenshot in perspective, they are stating that you don’t have to pay.

we shouldn’t be fanning the flames if we haven’t got a request to pay yet.

 

[kozuki]

To put that screenshot in perspective, they are stating that you don’t have to pay.

we shouldn’t be fanning the flames if we haven’t got a request to pay yet.

well, they already told me that I would need to pay VAT to them, which was uncalled for, and my local customs are saying that I would need to pay import VAT here too, unless PCS actually send over documents for the customs and cover that payment somehow, not sure how that works, but please update how your situation changes once your PC reaches the border.

 

[ubuysa]

To put that screenshot in perspective, they are stating that you don’t have to pay.

we shouldn’t be fanning the flames if we haven’t got a request to pay yet.

Wise words.

well, they already told me that I would need to pay VAT to them, which was uncalled for, and my local customs are saying that I would need to pay import VAT here too, unless PCS actually send over documents for the customs and cover that payment somehow, not sure how that works, but please update how your situation changes once your PC reaches the border.

It is a difficult issue and is just one I think of many such issues surrounding the sudden breaking of long established practices. It's clear I think that since at the time of order the UK was still in the transition period and following the single market rules, PCS would have been obliged to add on UK VAT - they likely had a legal duty to do so. Now however the UK is not part of the single market and not following EU rules, so the goalposts have effectively moved. That's not as 'outrageous' as you seem to think, it's just a consequence of Brexit.

In the absence of any specific terms in either the withdrawal agreement or the trade deal, I would hope that common sense would prevail and that Ireland would accept that since the contract and payment predate the UK's final exit from the EU, they would allow its import without further tax or duty. Sadly common sense isn't something very common where governments are concerned...

 

[kozuki]

Wise words.



It is a difficult issue and is just one I think of many such issues surrounding the sudden breaking of long established practices. It's clear I think that since at the time of order the UK was still in the transition period and following the single market rules, PCS would have been obliged to add on UK VAT - they likely had a legal duty to do so. Now however the UK is not part of the single market and not following EU rules, so the goalposts have effectively moved. That's not as 'outrageous' as you seem to think, it's just a consequence of Brexit.

In the absence of any specific terms in either the withdrawal agreement or the trade deal, I would hope that common sense would prevail and that Ireland would accept that since the contract and payment predate the UK's final exit from the EU, they would allow its import without further tax or duty. Sadly common sense isn't something very common where governments are concerned...

The outrageous part was that this was without any warning and with no real disclaimers from the sellers side, just a quick email saying that my purchase is now no longer valid and I need to pay up, just like that. I would accept these terms if I knew that this VAT would cover the import VAT at the customs, but without knowing for sure and with such little explanation from PCS side, I fear that I could end up paying VAT to PCS, which puts my order at a high total sum, which would then get another 21% VAT on top when at the border here and I would end up overpaying so much that I would rather cancel and refund even after 3+ months of waiting.
All I ask for is clear communication and details from PCS, I know that it's not their fault for all the government rules and other formalities that happened with brexit, but as Nurse pointed out, they don't even need to charge the VAT that they want to get now

 

[ubuysa]

The outrageous part was that this was without any warning and with no real disclaimers from the sellers side, just a quick email saying that my purchase is now no longer valid and I need to pay up, just like that. I would accept these terms if I knew that this VAT would cover the import VAT at the customs, but without knowing for sure and with such little explanation from PCS side, I fear that I could end up paying VAT to PCS, which puts my order at a high total sum, which would then get another 21% VAT on top when at the border here and I would end up overpaying so much that I would rather cancel and refund even after 3+ months of waiting.
All I ask for is clear communication and details from PCS, I know that it's not their fault for all the government rules and other formalities that happened with brexit, but as Nurse pointed out, they don't even need to charge the VAT that they want to get now

I would hope, and TBH expect, that if you have to pay VAT on import that PCS would refund you the UK VAT. The process to get that refund and then get it to you may be a long one however because this is all so new.

I do understand your anger here but companies have to follow the tax rules that are in place at the time. When you placed your order nobody knew whether there would be a trade deal nor what the terms were likely to be, so there would have been no way PCS could have advised you of anything. And as I've mentioned, at the time of your order they were under a legal obligation to charge you VAT.

I would suggest you wait and see what happens when it gets to you. If you have to pay VAT on import I would then contact PCS asking for a refund of the UK VAT you've paid (with proof of VAT paid on import of course).