On Tue, 11 Jul 2006 08:13:11 +0100, MM <> wrote:
>Is this not just a scam to give a further 17 per cent to the US
>company? Or how does the tax wander back to HM Treasury? I suspect it
>does not, but stays in the US to the benefit of the company's
>shareholders.
>
>MM
When has it ever gone to the US?
--
Peter Saxton from London
On Tue, 11 Jul 2006 08:38:06 +0100, Peter Saxton
<> wrote:
>On Tue, 11 Jul 2006 08:13:11 +0100, MM <> wrote:
>
>>Is this not just a scam to give a further 17 per cent to the US
>>company? Or how does the tax wander back to HM Treasury? I suspect it
>>does not, but stays in the US to the benefit of the company's
>>shareholders.
>>
>>MM
>
>When has it ever gone to the US?
I pay for software online. It is delivered online. The company
delivering it is in the US (or Australia, or Outer Mongolia, or
wherever). At what point is the VAT component that I have paid to the
US company transferred to HM Treasury? If it is not so transferred,
then the "tax" is merely a way of increasing the price of the goods
for the benefit of the foreign business.
MM
Peter Saxton wrote:
> On Tue, 11 Jul 2006 08:13:11 +0100, MM <> wrote:
>
>>Is this not just a scam to give a further 17 per cent to the US
>>company? Or how does the tax wander back to HM Treasury? I suspect it
>>does not, but stays in the US to the benefit of the company's
>>shareholders.
>
> When has it ever gone to the US?
There are apparently new regulations in place, as of fairly recently,
which oblige[*] foreign (non-EU) regular importers of goods into the EU
to charge VAT to EU customers and register with the relevant national
VAT authority. This is supposed to simplify the procedure whereby
VAT would otherwise be charged when the goods come into the country,
not to mention to close the loophole in the case of intangible goods
and services.
--
[*] I don't know how they can enforce these on foreign soil, but no
doubt there are suitable unpleasantnesses which they can unleash if
the foreign authorities conspire (I mean co-operate).
Ronald Raygun wrote:
> Peter Saxton wrote:
>
>> On Tue, 11 Jul 2006 08:13:11 +0100, MM <> wrote:
>>
>>> Is this not just a scam to give a further 17 per cent to the US
>>> company? Or how does the tax wander back to HM Treasury? I suspect it
>>> does not, but stays in the US to the benefit of the company's
>>> shareholders.
>> When has it ever gone to the US?
>
> There are apparently new regulations in place, as of fairly recently,
> which oblige[*] foreign (non-EU) regular importers of goods into the EU
> to charge VAT to EU customers and register with the relevant national
> VAT authority. This is supposed to simplify the procedure whereby
> VAT would otherwise be charged when the goods come into the country,
> not to mention to close the loophole in the case of intangible goods
> and services.
Does that mean when I order things eg off ebay from HK that I /won't/
get charge VAT, just duty? How would they know whether the sender is
registered/charging VAT or not?
--
Please use the corrected version of the address below for replies.
Replies to the header address will be junked, as will mail from
various domains listed at www.scottsonline.org.uk
Mike Scott Harlow Essex England.(unet -a-t- scottsonline.org.uk)
Mike Scott wrote:
> Does that mean when I order things eg off ebay from HK that I /won't/
> get charge VAT, just duty? How would they know whether the sender is
> registered/charging VAT or not?
The sender will, if registered, be able to supply you with a VAT
invoice which will prove to customs that VAT has already been paid.
On Tue, 11 Jul 2006 14:29:01 GMT, Ronald Raygun
<> wrote:
>Mike Scott wrote:
>
>> Does that mean when I order things eg off ebay from HK that I /won't/
>> get charge VAT, just duty? How would they know whether the sender is
>> registered/charging VAT or not?
>
>The sender will, if registered, be able to supply you with a VAT
>invoice which will prove to customs that VAT has already been paid.
Do you not detect a certain whiff of ordure around this issue? I
certainly do! Supposing, for example, that the software company is
only a small outfit and is VAT exempt (or whatever the equivalent is
of that status). The extra few quid I pay them supposedly to cover VAT
as a European purchaser goes where, exactly? Plus, there is also the
question that not all EU VAT rates are harmonised. Germany is due to
raise its VAT to 19% soon. What rate are companies in the States
liable to levy on European sales? I sense a potential scam gathering
steam...
MM
MM wrote:
> On Tue, 11 Jul 2006 14:29:01 GMT, Ronald Raygun
> <> wrote:
>>
>>The sender will, if registered, be able to supply you with a VAT
>>invoice which will prove to customs that VAT has already been paid.
>
> Do you not detect a certain whiff of ordure around this issue? I
> certainly do! Supposing, for example, that the software company is
> only a small outfit and is VAT exempt (or whatever the equivalent is
> of that status).
Then they will not charge VAT.
> The extra few quid I pay them supposedly to cover VAT
> as a European purchaser goes where, exactly?
If they don't charge VAT, this question does not arise.
Are you suggesting they would *pretend* they were registered, and
would purport to charge you VAT unnecessarily, to go straight into
their profits? In that case why would they not simply charge you
a higher price straight up?
> Plus, there is also the
> question that not all EU VAT rates are harmonised. Germany is due to
> raise its VAT to 19% soon. What rate are companies in the States
> liable to levy on European sales?
The rate applicable in the country to which the goods are being sent.
If intangible, i.e. if they're not sent on a physical medium such as
CD, but transmitted online, then it's presumably the country from which
the stuff is being ordered. You would have to tell them your address,
which is no doubt verified against your credit card. Otherwise you
could tell them anything, e.g. that you live in Portugal, or whatever
country has the lowest VAT rate.
"MM" <> wrote in message
news:
> On Tue, 11 Jul 2006 14:29:01 GMT, Ronald Raygun
> <> wrote:
>
>>Mike Scott wrote:
>>
>>> Does that mean when I order things eg off ebay from HK that I /won't/
>>> get charge VAT, just duty? How would they know whether the sender is
>>> registered/charging VAT or not?
>>
>>The sender will, if registered, be able to supply you with a VAT
>>invoice which will prove to customs that VAT has already been paid.
>
> Do you not detect a certain whiff of ordure around this issue? I
> certainly do! Supposing, for example, that the software company is
> only a small outfit and is VAT exempt (or whatever the equivalent is
> of that status). The extra few quid I pay them supposedly to cover VAT
> as a European purchaser goes where, exactly? Plus, there is also the
> question that not all EU VAT rates are harmonised. Germany is due to
> raise its VAT to 19% soon. What rate are companies in the States
> liable to levy on European sales? I sense a potential scam gathering
> steam...
>
> MM
One VERY big US tech firm I worked for a few years ago had some very bizarre
accounting rules with regards sold in the UK. They convinced themselves they
were on some kind of deal with HM Government - am more convinced that they
were just incredibly arrogant - and their price list for internal customers
was something to believe - i.e. what the stuff was made for against what you
and I paid for it. To this day I am not sure what was going on other than I
became convinced that the UK taxman was not getting all he/we should. I
suspect this is common with US tech companies over here?
MM wrote:
> Do you not detect a certain whiff of ordure around this issue? I
> certainly do! Supposing, for example, that the software company is
> only a small outfit and is VAT exempt (or whatever the equivalent is
> of that status). The extra few quid I pay them supposedly to cover VAT
> as a European purchaser goes where, exactly?
If they are VAT exempt, they shouldn't charge you VAT. If you are
concerned, ask for their VAT number and check with HMRC.
> Plus, there is also the
> question that not all EU VAT rates are harmonised. Germany is due to
> raise its VAT to 19% soon. What rate are companies in the States
> liable to levy on European sales? I sense a potential scam gathering
> steam...
The rate in the country they are selling to.
Ronald Raygun wrote:
> e.g. that you live in Portugal, or whatever
> country has the lowest VAT rate.
Luxembourg has the lowest rate.
Alternatively, you could say you live outside the EU and pay nothing. But
that is tax evasion, and you could suffer very severe penalties if caught.
On Tue, 11 Jul 2006 15:47:33 +0100, Jonathan Bryce
<> wrote:
>MM wrote:
>
>> Do you not detect a certain whiff of ordure around this issue? I
>> certainly do! Supposing, for example, that the software company is
>> only a small outfit and is VAT exempt (or whatever the equivalent is
>> of that status). The extra few quid I pay them supposedly to cover VAT
>> as a European purchaser goes where, exactly?
>
>If they are VAT exempt, they shouldn't charge you VAT. If you are
>concerned, ask for their VAT number and check with HMRC.
So any US-based business has to apply to HM Inland Revenue and Customs
for VAT registration before it may sell to UK customers, yes?
MM
MM wrote:
> So any US-based business has to apply to HM Inland Revenue and Customs
> for VAT registration before it may sell to UK customers, yes?
No. Obviously low-volume traders would not. I presume that this
would only be necessary if they supplied more than £60k worth of
stuff to the UK/EU per year, or some such similar threshold.
On Tue, 11 Jul 2006 15:25:58 GMT, Ronald Raygun
<> wrote:
>MM wrote:
>
>> So any US-based business has to apply to HM Inland Revenue and Customs
>> for VAT registration before it may sell to UK customers, yes?
>
>No. Obviously low-volume traders would not. I presume that this
>would only be necessary if they supplied more than £60k worth of
>stuff to the UK/EU per year, or some such similar threshold.
Is it actually not really the case that no US business has a blessed
clue what would be meant by "VAT registration"?
MM
MM wrote:
> So any US-based business has to apply to HM Inland Revenue and Customs
> for VAT registration before it may sell to UK customers, yes?
They have to apply to a VAT office in an EU country of their choice. That
registration will cover sales to all EU countries. They tell that VAT
office how much of the VAT relates to each country and they pass it on to
the appropriate VAT offices.
On Tue, 11 Jul 2006 18:35:01 +0100, Jonathan Bryce
<> wrote:
>MM wrote:
>
>> So any US-based business has to apply to HM Inland Revenue and Customs
>> for VAT registration before it may sell to UK customers, yes?
>
>They have to apply to a VAT office in an EU country of their choice. That
>registration will cover sales to all EU countries. They tell that VAT
>office how much of the VAT relates to each country and they pass it on to
>the appropriate VAT offices.
So I should, in fact, be able to request confirmation of their VAT
registration? I do not mind paying VAT as long as it wanders back to
HM treasury somehow. What I would object to is some foreign scrotes
using it as an excuse to cream off more profit. Given the shambles
that is the current British government I very much doubt whether any
checks are being made. Ergo there is a strong likelihood that UK
customers are vulnerable to being ripped off.
MM
"MM" <> wrote in message
news:
> On Tue, 11 Jul 2006 18:35:01 +0100, Jonathan Bryce
> <> wrote:
>
>>MM wrote:
>>
>>> So any US-based business has to apply to HM Inland Revenue and Customs
>>> for VAT registration before it may sell to UK customers, yes?
>>
>>They have to apply to a VAT office in an EU country of their choice. That
>>registration will cover sales to all EU countries. They tell that VAT
>>office how much of the VAT relates to each country and they pass it on to
>>the appropriate VAT offices.
>
> So I should, in fact, be able to request confirmation of their VAT
> registration? I do not mind paying VAT as long as it wanders back to
> HM treasury somehow. What I would object to is some foreign scrotes
> using it as an excuse to cream off more profit. Given the shambles
> that is the current British government I very much doubt whether any
> checks are being made. Ergo there is a strong likelihood that UK
> customers are vulnerable to being ripped off.
>
> MM
IMHO unlikely, since by raising their prices by 17.5% they are becoming less
competitive compared to other cos that arent charging that. AIUI, what is
happening is that for v large cos, or cos with a substantial UK or Euro
presence, C&E are putting the frightneners on. If its just, say a US only
co, or a HK only co, they have no leverage to force the company to charge
VAT. Dont forget the expense to the company of having to change its software
to cope with this, esp if it didnt do any tax collection before, I'm sure
the vast majority dont want to do it.
entirely hypothetically of course, there are two ways of not being asked for
the tax, depending upon how the company distinguishes you at being of UK
origin. If its looking at your address, then if you change it to a US
address, it wont charge you (address doesnt matter for downloading
software!). OTOH if they distinguish on whether your credit card is deemed
to be a UK one, then you are probably stuffed unless you ahvea US one.
Not sure about PayPal and whether that might be a way round that, my mate
hasnt tried , (yet), for example, registering with a US address with a UK
credit card, to be charged in dollars, with a 'US' paypal account,he doesn't
even know if thats possible.
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
MM wrote:
> So I should, in fact, be able to request confirmation of their VAT
> registration? I do not mind paying VAT as long as it wanders back to
> HM treasury somehow. What I would object to is some foreign scrotes
> using it as an excuse to cream off more profit. Given the shambles
> that is the current British government I very much doubt whether any
> checks are being made. Ergo there is a strong likelihood that UK
> customers are vulnerable to being ripped off.
Yes. Ask them what their VAT number is, and which country they are
registered in, and then check with the VAT office in that country to see if
that registration is valid and belongs to that supplier.
I suspect an American company will most often chose to register in either
the UK or Ireland so that they can deal with people who speak English.
MM wrote:
> I pay for software online. It is delivered online. The company
> delivering it is in the US (or Australia, or Outer Mongolia, or
> wherever). At what point is the VAT component that I have paid to the
> US company transferred to HM Treasury? If it is not so transferred,
> then the "tax" is merely a way of increasing the price of the goods
> for the benefit of the foreign business.
They register for VAT with an EU country of their choice.
Lets suppose they chose Ireland.
Every three months, they send a return to the Irish Revenue Commissioners.
This gives the total sales to each of the 25 EU countries, and the VAT
collected on them. They also send them a payment for the total VAT due.
The Irish Revenue Commissioners then keep the Irish bit of the payment for
themselves and pass the rest of the money to the countries concerned.
Presumably there is some sort of arrangement whereby if they owe HMRC some
money and HMRC owe them money collected from another trader, they net them
off and pay the balance over.
Presumably the Irish Revenue Commissioners also get to keep a bit of the
money they collect on behalf of other countries to cover their expenses in
collecting it.
On Wed, 12 Jul 2006 14:49:54 +0100, Jonathan Bryce
<> wrote:
>MM wrote:
>
>> So I should, in fact, be able to request confirmation of their VAT
>> registration? I do not mind paying VAT as long as it wanders back to
>> HM treasury somehow. What I would object to is some foreign scrotes
>> using it as an excuse to cream off more profit. Given the shambles
>> that is the current British government I very much doubt whether any
>> checks are being made. Ergo there is a strong likelihood that UK
>> customers are vulnerable to being ripped off.
>
>Yes. Ask them what their VAT number is, and which country they are
>registered in, and then check with the VAT office in that country to see if
>that registration is valid and belongs to that supplier.
>
>I suspect an American company will most often chose to register in either
>the UK or Ireland so that they can deal with people who speak English.
This is a very useful response, many thanks.
MM