"Charging VAT to Customers outside of the EU" Topic

Hate it. Really, really despise it.

I was just about to order a few items from a handful of companies that are based in the EU. I have in the past year probably paid a few hundred dollars in VAT fees that should not have been charged, and at this point I am done with it (might just be being tired of paying my own taxes and no longer wanting to pay other peoples on top of that all).

I know a few companies that will adjust prices if you email them and request it…and a few companies have spent the extra few minutes to set up their carts to not charge VAT – but a large majority of them, especially smaller companies charge you VAT even if they should not.

At this point, I am done with it. I will no longer buy from any company that charges me VAT.

For reference – at least in the UK, here is the guidelines from the HMRC that explains that VAT should not be charged to exported goods (exported out of the EU that is).

link

2.2 Why does zero-rating apply to exports?

VAT is a tax levied on goods and services consumed in the EC. When goods are exported they are "consumed" outside the EC and to impose VAT on such goods would be contrary to the purpose of the tax. Therefore, the supply of exported goods is zero-rated provided certain conditions are met.

As I understand it from a number of other threads on TMP regarding the VAT is that many of the smaller miniature manfacturers are too small to be registered & required to collect VAT. So the reason they may not be reducing the price is because they're not collecting it.

Help! Mr. Wizard! (Dom…)

Urban Mammoth charges VAT for US customers. They say they cannot remove it due to the cart system. Combined with their expensive shipping, I avoid them even when running 50% off sales. When asked about this, I got a reply that I could have a free book equal to the VAT cost--didn't help because I didn't need a print version of their rules! Grrrrr…. So they normally pocket the extra profit from US customers.

I've not got the energy, but note that "especially smaller companies" is missing rather a big point; companies grossing less than £70,000 a year are normally not VAT-registered, so (a) they're not charging you VAT and therefore (b) they can't deduct the VAT for you, since they're not charging it in the first place….

Dom, who can only dream of being a big enough earner to worry about VAT-registration….

Now don't go bringing sense into this Dom…

I'm quite failing to understand this rash of threads. The full moon isn't until next Tuesday.

Allen

I have just added this one to my list.

TMP link

Dom is NOT making £70,000 a year selling decals to penny pinching gamers?
I am shocked.

I've not got the energy, but note that "especially smaller companies" is missing rather a big point; companies grossing less than £70,000 a year are normally not VAT-registered, so (a) they're not charging you VAT and therefore (b) they can't deduct the VAT for you, since they're not charging it in the first place….

If the price says – Including VAT…I would assume, they are charging VAT.

If they are outside of the UK – the threshold is not necessarily £70,000…as I understand it, Spain has no threshold (location of two of the companies).

I'll feel bad about gamers outside the EU having to pay VAT (like the rest of us inside of the EU) when we don't have to pay the dollar price for US miniatures in pounds (or close enough to it).

The VAT threshold in the UK is the compulsory threshold – you can apply to be VAT registeed below that, which means you can claim back VAT you pay on goods as well. Generally though it isn't worth doing. Personally, I would love to be forced to register for VAT, but I'd need to sell a lot more figures.

Sorry, don't feel much empathy for those 'smaller' companies that have prices that match the VAT added prices charged by the bigger companies and won't knock it off for the non-EU customer. Seems per comments above that they pocket the extra from EU customers as well.

Now if the EU manufacturers were to pay US income taxes on that portion of their sales to US customers, I might have to change my opinion.

Sorry, don't feel much empathy for those 'smaller' companies that have prices that match the VAT added prices charged by the bigger companies and won't knock it off for the non-EU customer. Seems per comments above that they pocket the extra from EU customers as well.

I think that's a bit harsh. A company with a small turnover and thus not registered for VAT will still have costs and overheads. They are not "pocketing extra cash" but are selling their wares are what (for them) are realistic prices so as to generate a reasonable profit margin. I'm sure Dom Skelton, Garrison Miniatures and others will explain.

For example, have you any idea how much contract casting actually costs?

If you're not VAT-registered you still have to pay VAT on all of your input costs, and can't claim it back. So knocking off the VAT you're not charging would actually mean taking a pretty massive hit on margin (as much as half given the level of wholesale discount typical in wargaming), as VAT is still being paid on the goods bought in, and can't be claimed back.

I should get all my figures for free! *waaaaahhhhh*
I should be able to get them painted for free too! *waaaaaahhhhh*
All the rules I want should be free too! *waaaaaaahhhh*

It's so unfair *sniff*

I'll feel bad about gamers outside the EU having to pay VAT (like the rest of us inside of the EU) when we don't have to pay the dollar price for US miniatures in pounds (or close enough to it).

I bought a new guitar last week, if I lived in the States it would have cost a lot less

link

link

499 dollars is 306 quid by today's exchange rate

Go figure.

I look at price per figure including shipping and tax, if it is reasonable then I don't give a rip how much of it is VAT, Taxes, or Shipping fees…

All the rules I want should be free too! *waaaaaaahhhh*

And I should win automatically when playing with them, too!

Dynaman8789,

I dont go that far, if I find something I like I buy it, there is a reason I work and it's not just to pay rent.

Could I just mention here that the non-VAT registered trader will still have to pay VAT on the goods when he buys them. Somewhere he has to recover that cost while the bigger guys pass it on or recover it on things they themselves buy for the firm – luxury yachts, second homes in the Caribbean – you know the sort of lifestyle things the wargames industry typically provides.

In theory VAT is recoverable if these VAT-paid goods are them exported from UK to a non EU location, but I suspect in practise the time taken to complete export the UK god-awful export documentation and the delay before the firm sees their money again would delete any profit on a £50.00 GBP order…….

So is it really extra profit margin for the trader, or do you see it reflected elsewhere – in say postage and handling charges?

If you really feel ripped off then vote with your feet….

But it works both ways. Im fed up with US companies (mainly IT or Software firms) charging VAT on orders just because I'm in the UK. The firms have no UK presence, no VAT registration number, and the dosh doesnt go into HMs Exchequer for the greater good. Just more dosh for them, not only unreasonable but downright fraudulent!

No taxation without representation I say! I want a US vote!

(PS if you order from the Channel Islands, there is a tax loophole which avoids you paying VAT on most items [currently]. They just dont charge it. I dont know if Jersey Wargames Society could give you a bit of advice!? )

If you really feel ripped off then vote with your feet….

I do. I don't order from UK companies where they try to charge me VAT.

"I do. I don't order from UK companies where they try to charge me VAT."

Great, so its cost you nothing. Dont gripe, just dont buy, then we are all happy!! :o)

Goragrad, I have to admit, charging 60/70p for a 25/28mm is a bit steep, and my 20% p&p rate to the US is way beyond the pale. I promise I'll try and do better in future.

Gosh as little as 20% :-). And the VAT registration threshold is now £73,000. It goes up each year in the budget.

Garrison Miniatures! My god man, you are still going!!!???!

My first beloved metals!

A friend (in the US) who has a small business dealing in both historical and fantasy figures recently told me that he'd stopped attending historical shows.

"Those guys are just too damn cheap," he said.

Despite the defensive and in some cases smart comments from the small businessmen, charging your customers a "tax" that you aren't supposed to be charging and that you don't have to forward on to the government is defrauding your customers. I don't begrudge the small businessman his living, but if he's willing to charge me an unneccessary fee just because he can, he clearly doesn't have any respect for me.

I realize the VAT is a pretty hefty burden. I do every thing I can to help wargamers in the EU get good deals on US products and I'm happy to support EU companies. I'm not looking at it as an us versus them situation. We're all in this hobby and this world together. I'm not looking for loopholes to take advantage of the small businessman and I expect the same in return.

I think that some of you are getting the wrong impression regarding 'small businesses' that are not VAT registered. None of them get away without paying VAT, as the VAT is charged by their suppliers on behalf of HMRC. I am not registered for VAT (oh to have a turnover of £73k), so if for instance I stock a range of figures from a UK based company, then by the time they come to me the VAT has already been paid further up the chain, and so is all part of the price I pay; I'm not then in a position to knock the 20% VAT off for buyers from outside the EU. The price to the customer does include VAT, but it isn't something that I am skimming off, it's already been in the tax mans coffers for some time.
Having said all that, I do recall a fairly large figure manufacturer being based at one time in the Channel Islands, charging the full VAT inclusive price, then shipping an order in several small boxes which slipped below the VAT level.

"Despite the defensive and in some cases smart comments from the small businessmen, charging your customers a "tax" that you aren't supposed to be charging and that you don't have to forward on to the government is defrauding your customers."

Total reading comprehension fail.

Allen

@The Wargames Command Post
I'm not refering to companies that stock someone elses minis, I'm talking about buying direct from the source. In fact I can think of one company in particular that charges US customers the VAT, but it's stockists in the UK knock the VAT off. I'm not the only person that has brought this to their attention, yet I've never seen a response from them.

I don't mind paying VAT when I order from the UK… I consider it my contribution towards keeping those twenty odd surface combatants of the RN afloat ;-)

Not sure about the defensive comment – simple fact is, if I was registered for VAT it wouldn't reduce the price to US customers, it would just increase the price to UK customers. When I cost things out, VAT is not part of the equation.

I run a very very small hobby business.
I sell to the USA and outside the UK and EU all the time.

I never knock VAT off my prices as it is not there to begin with.

If I have a 20% discount from a supplier and then 'knock off the VAT' which I can't claim back for not being VAT registered I will have 0% profit on it.

Besides it is not a case of not knocking the VAT off, it is not there to be knocked off.

Not all UK businesses will be charging VAT on their products.

Michael.

As usual with these discussions on VAT someone gets fixated on the idea that they are being cheated when it is simply that they don't understand (or won't understand) how it works in the UK where small businesses are concerned.

It is, I'll admit, pretty confusing but it has been explained so many times that I'd have thought that, by now, people would have got the idea.

Just to be devil's advocate:

It's also perfectly legal for a company to charge a different (higher or lower) price, depending on which country they're selling to. If it's good enough for car and electronics manufacturers…

That's been Foundry's M.O. for many years: not only no need to deduct VAT, but you can jack up the price well beyond the exchange rate--and then offer free postage on large orders. Quite legal, also misunderstood.

Allen

As usual with these discussions on VAT someone gets fixated on the idea that they are being cheated when it is simply that they don't understand (or won't understand) how it works in the UK where small businesses are concerned.

Actually it seems that there is a fixation by people in the UK that we must be talking about them.

One of the companies I was going to order from was in the UK, two in Spain and one in Germany. All of them stated that the prices included VAT. None of them were resellers (they were the manufacturers of the items). None of them adjusted the price to knock off the VAT.

I included the line from the HMRC because, it was in English and easy to follow. I could have pulled the info from the EU website as well, but it is a bit of a mess…and the individual countries (Germany and Spain in this case) were even more difficult to follow. However, the same guidelines apply – if you are not a customer in the EU you do not pay VAT.

I do not expect companies to knock off VAT if it isn't there, however if it is there – I should not pay it.

Quite legal, also misunderstood.

Actually, possibly not (the charging of VAT…not the jacked up exchange rates). I have been in contact with a few of the VAT officials in the past few days and I can actually file a claim to have the VAT refunded to me by the appropriate VAT officials. As I understand it, they will then audit the account of the company that charged the VAT fee and if it was not paid to them, they charge the company (along with whatever penalties and fees that are appropriate for the country in question).

You can do the same thing with souvenirs that you buy while in country. Just a matter of whether or not the paperwork is worth the hassle.

From my experience the smaller UK guys are very good dealing with VAT questions and issues. I've experienced the exact opposite with non UK companies, but as was noted if I really want the figs, I'll buy them.

I too live in a Godforsaken country that are not part of the EU (Norway).
I fully understand that when a manufacturer is not VAT registered there are no VAT to deduct.
However there are a number of companies that state that their prices does include VAT.Now, To charge VAT to a non EU customer is wrong.Most companies when being told this will adjust the price or simply reduce postage cost.This will be about the same price anyway.This is if their WEB basket cant be adjusted.However there are some companies that dont give a damn and charge this extra anyway.Them I stay way clear off.
Because I see that as a fraud.I should pay the same price as any EU customer before the VAT is added since this is a EU tax.
Sven

These allegations often crop up here on TMP, but no companies are ever named, so the allegations can never be proved or disproved. Despite numerous threads on this topic, I don't recall ever seeing demonstrable proof of wrongdoing by a named company and this alleged practice remains a 'Dark Rumour' along with UFOs, Yetis and Bricoles.

And American customers keep wondering why an imported bag of miniatures cannot be sold for the exact currency conversion amount as seen in British magazines.

The VAT is one reason, US customs costs is another while very high postage costs to import them is most of it.

Small purchases are often not bothered with by customs.

Can I just state, that I have had VAT charged to american orders that included state tax, and delivery…which i though should not have been charged to people outside the US. Perhaps there is a rule about registering for foreign exports like VAT operators in the UK?

In the States, mail and internet order guidelines for collecting sales tax varies greatly between States. Some do not collect any. Many collect Sales Tax only if the stores and the buyer are located in the same State. A frew of the big States collect tax regardless of where the customer is located.

I do not charge sales tax to out of State customers but I am a very small fry operation.

RMD, I've named a manufacturer in the past, and got involved in a lengthy and at times tense email discssion with them as a result. Hence I won't name names.

To their credit, that company isn't trying to screw around over seas orders, the poor chap is struggling with a terrible regulatory framework.

Well we dont charge VAT to non-EU or to EU customers with a Euro-VAT number!

D

antenocitisworkshop.com
governanceoftechnology.com

Since Mr R Mark Davies think I believe in UFOS and yetis
I find his remark insulting….

No I dont want to name any companies.
But on the top of my head I remember at least 2.
From one of them I got the answer back that they do it as everyone else do it.

Instead I want to name a few manufacturers that Do deduct VAT.

Warlord games…….and the to companies that I could name can also be bought from them.

Pendraken ,which I am going to buy more from since they do really good minis.

I am also into railway modelling and companies like
Slaters plastikcard and Justliketherealthing.
deduct VAT just like a British company( and EU) should when they are dealing with people outside the European Union.

I find it absolutely ridiculous that I should name a specific company for people to get me.

Sven Lovstrom
Yeti lover and UFO hunter…….Dont know what a Bricole is but probably is that too.

If I wanted to be insulting, I could do much better.

My point is that we get these threads with tedious regularity, yet nobody ever produces any proof that the problem of UK/EU-based wargames companies deliberately ripping people off exists. As McWong says above, his experience was that the company he dealt with had made a genuine mistake due to the insanely complicated VAT system. From previous threads here, it's also clear that many non-EU people don't realise that not all companies apply VAT.

I used to do some work for a wargames company that regularly received angry trans-atlantic demands to refund VAT. In one instance they took their rant on to an internet forum. The company was not VAT-registered and had not charged VAT in the first place, yet the complainants would not be convinced otherwise.

But that is ok
If the company is not VAT registered there is no VAT to deduct.I also wrote that in my first post.
But the companies I talk about did list their prices including VAT.When asked about this they just ignored and said that everyone does it.A company must work out with how much they can sell their stuff for and then add VAT on top.
If sold to an non EU country then it should be taken off.
I see that some complain about postage and VAT.That is simple.
That is a service in the UK so should include VAT even when sent to a non EU country.
Sven