A practical question here: I’ve ordered a Dwarf at the very early Kickstarter sale. I think I paid it including VAT. However, as I live in the UK, should I fear that post Brexit taxes are going to be applied by the British customs when the unit is finally shipped?
I am not exactly sure.
Kickstarter does not differentiate between countries that apply and those that do no apply VAT and does not allow for different prices depending on country.
The Dwarf ships from Germany, which is inside the VAT zone.
It is on us to properly account for VAT later for the shipments that happen inside the VAT zone.
It is on the customer to pay for any duties and taxes in case his shipping address is outside of the VAT zone.
In principle, from January 1st onwards you would need to go through the import process, but there seems to be a 6-month transition: Customs and VAT after Brexit: What happens for UK businesses? | Sage Advice United Kingdom
There is a bit of that for sure.
I’ve been wondering about this too. Given that the “deal” was so last minute, most of the advice doesn’t seem to be up to date yet - so once things have settled we should be able to work out what’s what. I have read comments about personal imports under £390 being exempt, so we may be OK. (edit - this may only be when bringing things through customs personally, rather than having things shipped…)
It also looks like the onus will fall upon Mod Devices to make the declaration etc, rather than us as buyers - we will “just” need to pay the fees!
I for one will need certainty about this before shipping, as I don’t wish to be hit with an extra charge, so might have to (regretfully) cancel my order. Let’s hope things become clear in the next few weeks…
This is an interesting question. I pre-ordered in July, with no thought about this possibility at all.
If I’ve understood correctly on this, one possibility is that Mod won’t need to pay German VAT (19% I believe) on Dwarfs exported outside the EU (Exporting to non-EU Countries), so a reasonable way to work-around this may be for Mod to refund that 19% of our pre-orders, and then we will have to pay 20% UK VAT (Tax and customs for goods sent from abroad: Tax and duty - GOV.UK) on receipt.
However, there is also this mention on a different UK gov page that “If a seller receives payment for an order before 11pm on 31 December 2020 and dispatches the item after that time, these rules will not apply.” (VAT and overseas goods sold directly to customers in the UK - GOV.UK), so possibly this clause allows for our Dwarf pre-orders to be exempt, but there’s no info on the mechanism for declaring them as pre-ordered before the transition.
I guess this will become clearer in time.
If it comes to worst, I think might be tempted to have my dwarf sent to my mum in France and to collect it from there next time I’ve got the opportunity to cross the channel. Would that be an option @gianfranco ?
I have read further and yes, there is a chance that UK customers will have to pay VAT.
I’m contacting our accountant to clarify this as everything related to Brexit has been so confusing and crowdfunding is also not something that the traditional accounting perfectly embraces.
The pledges are not actual sales at the moment of the campaign. The crowdfunded project might fail and, in this unfortunate case, there is no tax to be paid as no products are shipped. Pledges are pre-payments
Once we ship, the pledge has become an actual sale and we then generate the invoices. At this moment, VAT is applied if applicable. This will happen in Q1/2021.
We will speak to the accountants and get back to your guys
Of course @Azza
I’m sure the accountants will be able to advise, but a lot of the info seems to be aimed at businesses in the UK importing from abroad, whereas (as I understand it), this is a case of us as individuals buying from outside the UK… so hopefully the guidance will become clearer soon! I may need to reconsider as well if VAT is payable. I hate Brexit!
EDIT - I should be able to get it sent to a relative in Ireland, so that may well be the best option anyway - simpler for the Mod Devices guys and for me!
Thanks for starting this topic. It honestly didn’t occur to me to think about this, so if anyone finds anything out, could you post here to let us know? Thanks!
Would be possible to change the delivery address to another country? Maybe before shipping to all UK costumers would be great to let us know how much extra we would have to pay and also give us the chance to ask for refund or change delivery address…
Yes, it is possible to change the delivery address. You can do it also on your account on Kickstarter or Indiegogo.
Regarding the extra costs, as you are certainly aware, the Brexit situation is a huge mess, so it’s really hard yet to understand these costs. Supposedly there will be a transition period, but no one knows yet how it will work during this period.
Hope that you understand.