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Author
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Topic: VAT tax in the UK?
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Osi Osgood
Film God
Posts: 10204
From: Mountian Home, ID.
Registered: Jul 2005
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posted November 29, 2008 10:15 AM
The first I ever heard of "vat" tax, was from Derann years ago, and I believe it means "value added tax", (which makes no sense to me!)
My question is, from what I have heard, all sellers have a value added tax on their items in the UK, but only Derann seems to take any off their prices for outside of the UK buyers, (it's currently at 15 percent off).
Is this only up to the UK seller if they wish to do as Derann does?
Do some sellers take that into account when they list their items in the first place?
I ask the UK seller to state as to why or why not they offer a VAT tax reduction for outside of the UK buyers.
I wouldn't be surprised if one of the reasons that Derann moves so much used film merchenise is partially due to thier VAT tax reduction (off they're already fairly low prices).
Granted, Derann does have more options than the seller who doesn't have new prints and other forms of video sales as well, which may allow them to have lower prices as a general rule.
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"All these moments will be lost in time, just like ... tears, in the rain. "
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Osi Osgood
Film God
Posts: 10204
From: Mountian Home, ID.
Registered: Jul 2005
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posted November 29, 2008 10:34 AM
Hey Chip, thanks for weighing in.
No used stock also has the VAT tax on it, but they take that off for out of the UK buyers. I must admit, it has helped make purchases a little easier, especially a few months ago when the dollar was 2.15 to every British pound, (it is now 1.50 to every British pound, and yet Derann still has the 15 percent off, making the used list even more affordable.).
I don't understand why some offer the discount and some don't, which is the reason for this post. I'm hoping some of the other sellers will weigh in with their opinions.
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"All these moments will be lost in time, just like ... tears, in the rain. "
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Maurice Leakey
Film God
Posts: 5895
From: Bristol. United Kingdom
Registered: Oct 2007
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posted November 29, 2008 10:53 AM
Every sale item (new or used), or service, in the UK has Value Added Tax @ 17.5%. The only exception is if the trader has an annual turn-over below a certain figure of UK pounds.
There are a few exceptions, such as food, books and childrens' clothes. In an attempt to get the UK economy moving, as from Monday 1st December 2008 the VAT will be reduced to 15%. This will last until the 31st December 2009.
Some firms offer sales VAT free for purchasers outside of the European Union, of which the UK is a member, although we still do not trade in Euro currency.
In the case of films which we buy, whether new or used, it is probable that some UK dealers whom we use do not pay VAT. In the case of Derann it is possible that they do, hence sales to the USA can be offered as "VAT free" and the appropriate reduction offered.
I used the word "services" earlier, this is also applied to the postage fee.
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Maurice
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Jim Carlile
Film Handler
Posts: 95
From: Burbank, California, USA
Registered: Apr 2007
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posted November 30, 2008 01:20 AM
Yes, my understanding has always been that VAT does not apply to foreign orders, at least American, and even Americans within Britain were exempt from the VAT. But I also thought that all retailers charged VAT, regardless of their size-- it would be an interesting loophole if not. Books used to be exempt-- are they still?
In the U.S., sales tax is determined by state, sometimes also by counties surcharging a little extra for their needs. In most states there is no sales tax on movie tickets (California for one) although there is a sales tax on video rentals-- figure it out.
Almost all products, but not services, have sales tax, with the exception of food or food-to-go (which is always violated by fast-food places). Magazines and newspapers didn't use to, but now they do-- same with candy.
For internet and mail orders, sales tax is only charged to residents within the same state as the seller, or where the seller has a 'presence.' That's why Amazon is sales-tax free in most areas, but Barnes and Noble isn't. Every once in awhile, some state will try to set up in office in, say, New York, to track orders, and there's usually some lawsuit to end the practice. California routinely would go after out-of-state orders on the grounds that residents were purchasing elsewhere "in-lieu" of California, but except for cars, they don't do that any more. If you buy a car in Vegas to get out of sale tax, they make it difficult to bring it in.
Some merchants will try to impose sales tax on all mail orders, no matter from where, but they are not supposed to unless they have a presence in the state of origin. So watch out for this.
In the U.S., yes, sales tax is applied at the time of purchase and is never included in the purchase price. Ever. The mentality in the U.S. is to not include sales tax within the price of anything. Not only would it be difficult to keep track of accounting-wise, but in America, merchants would view that as paying the tax themselves and losing 8.5% profit or whatever!
So the rough rule is-- if you are out-of-state or out of country, don't let anyone charge you sales tax, and in the U.S, it's always a surcharge.
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Stewart McSporran
Master Film Handler
Posts: 272
From: Glasgow, Scotland
Registered: Nov 2003
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posted November 30, 2008 10:48 AM
Having had to VAT register my business last year I can go into screeds of detail; but essentially all the above is close enough.
The tricky one is on second hand goods that are bought from non vat registered sources, i.e. antique dealers buying from the public. I think in this case the vat is charegable on the profit, but I'm not 100% sure, so I keep my film collecting well away from my company activities!
The most annoying situation I find is when I buy prints from the USA and the seller marks up the value of the film so that the insured amount is maximised. All done with the best of intent, but it does mean that the revenue charge me VAT on the declared amount, not what I actually paid for it. Yes, you can get the difference back, eventually, but in those cases where it's made the difference between the revenue letting it through at no cost or having to pay some then there's still the Post Office's £8 handling fee to pay - which you don't get back, ever.
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Winbert Hutahaean
Film God
Posts: 5468
From: Nouméa, New Caledonia
Registered: Jun 2003
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posted December 01, 2008 05:33 AM
Thanks Maurice, and indeed, since Derann is a VAT registered company than it is a great possibility we (as a non EU Citizen) can get our tax refunded.
Osi and David, once you make a visit to the UK, remember about this, while you do not pay extra postage, you will also get the tax refund!!
Hopefully, someone from Derann can explain that here...
regards,
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Winbert
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