Hacker News Reader

Comment by libertine | Hacker News Reader

VAT is pretty straight forward, it has to be collected on sale (so the sale price must reflect the price + VAT for that country), and then given back to the country (periodically, which usually is every 3 months).

What was happening was that collection was being done by the customs, and only a small fraction of the goods were being flagged for not having VAT, then they had to collect it, and then proceed to return it. This puts an extra layer of work on customs, and many goods are sold at a price that can't be matched by EU businesses because they have to collect VAT.

So EU now demands businesses that want to do business in the EU to do what every EU business does: collect VAT on sale and return it.

View on HN

A friend recently tried to sell something small to UK, after January 1st 2021.

The end result is that the cost of doing business went so far out of scope he decided to simply stop any sales to UK, because UK wanted him to pay register for VAT and pay it. This is much more complicated than it sounds, not only because of the registration requirements.

Simply put, just figuring out how the frak do we note the UK VAT on the invoice started to sound more expensive than the sales lost by just ignoring UK. Because there's no space in VAT system to put VAT twice, or at least no clear guidance could be achieved. And yes, he would need to put in VAT twice - first the 0% export declaration to Polish tax office, then somehow add the UK vat for UK, then figure out how to declare it so that the UK VAT collected isn't taxed locally as income.

I understand what you're saying, but that's basically bureaucracy and the billing systems that we use - which I agree can be hard to figure out, and a lot of times doesn't seem to make sense.

In my country if you ask the majority of accountants about some of these matters, they don't know how to reply to you, or don't do it because they're afraid of getting it wrong. If you call the Finances 3 times, you might get 3 different answers.

It's a mess.

Thing is, it's not straightforward, especially with UK jumping head first with little warning into moving VAT payments from logical place (customs) to illogical place (foreign seller).

And the guidance on HMRC page is so convoluted that it's hard to figure out if there's an exemption or not (hint: there's none, you're fucked, and welcome to trying to figure the declaration differences between sub-135 GBP and above it)

>Thing is, it's not straightforward, especially with UK jumping head first with little warning into moving VAT payments from logical place (customs) to illogical place (foreign seller).

This will be the protocol for EU as well, but it was delayed to June 2021 if I'm not mistaken!

But I'm with you, information about such matters is so detached from the "regular" citizen it's weird how in 2021 things aren't straight forward. Like people give shit to Terms & Services of apps, social networks, etc, because they're are ridiculously lengthy and with legal/uncommon language, but a lot of government documentation and laws are written the same way.

Yes, I know this will be protocol too - I don't even have any expectations Poland will handle it better too, but that's a different topic. But that's why I mentioned "Jumping head first". Because that's what they effectively did.

And in the other direction as well. I live in the EU and used to buy clothing from a UK e-store which would trivially arrive a few days later. This year, my 35eur shirt got stuck in customs and I had to pay another 40 to retrieve it (vat + customs fee). That was the last time I'll be buying online from UK.

Reply on news.ycombinator.com