Brexit: clarifying the VAT position for EU buyers

As the UK has now left the European Union, the rules on VAT have changed. EU customers will now note that, when they go to checkout their purchases in our online shop, VAT will not be added to the total. Instead, VAT will be payable by the buyer at the point of import.

The changes to VAT are explained in detail by the Institute of Government but we include some helpful snippets below.

About VAT on Classic Retrofit purchases

In normal domestic transactions, we charge the buyer VAT and then pay the VAT to the taxman. This was also the situation with private buyers in the EU up to the end of last year. EU business sales had a different process.

However, the UK has now left the EU VAT area and become a third country. This means that the way businesses manage VAT on goods and services exported and imported to/from the EU has changed. Sellers no longer charge VAT to EU customers; instead, buyers pay VAT at the point of import, along with any other applicable customs duties.

VAT to Northern Ireland

While Northern Ireland remains in the UK, the rules on cross-border VAT are different. There is now a new VAT border in the Irish Sea, with the rest of the UK outside the EU VAT area. This means that Northern Ireland customers buying goods from Great Britain have to pay VAT to HMRC when they import the goods, rather than to us, their supplier.

Price Rises 2021

The big change at this end is that all overseas sales now require the same export paperwork, and completing this documentation is not a quick process. As so much of our business is export, this has created a huge additional paperwork burden. As a consequence, we may have to introduce some price increases - our first in several years. So the message is clear: order now to beat the price rises!