VAT question

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calalum

·Mar 10, 2017

If I go to England (or another country with a VAT) and buy a watch, when I leave will I be refunded the VAT amount? If not, why? If yes, why don't people do that all the time? What is the VAT on a watch anyway? Do only certain types of businesses join in the VAT refund scenarios? And if I don't get the VAT refund, does the dealer keep the VAT amount or pay it to the government?

Thanks all.

 

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Spacefruit

·Mar 10, 2017·Prolific Speedmaster Hoarder

Second hand watches are usually on the margin scheme, and that is non reclaimable.

New watches have 20% but you will only get 13% at the airport because the system is bent.

What you can do is ship the watch. A U.K. Seller cannot charge you vat if he exports the watch.

 

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calalum

·Mar 10, 2017

What does this statement mean: "Second hand watches are usually on the margin scheme..." So are some second hand dealer watches subject to VAT?

Thanks.

 

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Spacefruit

·Mar 10, 2017·Prolific Speedmaster Hoarder

The margin scheme is where vat is deducted from the profit.

This amount is not disclosed to the buyer.

So if a watch cost 900 and sells for 1000, the vat due is 20% of profit i.e. £20. Otherwise pre margin scheme there was vat liable in the whole amount of 1000, which would then cost the buyer 1200.

My information might be out of date as I last traded in U.K. 15 years ago. But I think it's still like that.

 

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63TR4

·Mar 10, 2017

If you live outside the EU and buy new, you can apply for a VAT refund too. This link should explain it all (for the UK only):

https://www.gov.uk/government/publi...-shopping-in-the-uk#what-is-tax-free-shopping

 

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Spacefruit

·Mar 10, 2017·Prolific Speedmaster Hoarder

63TR4

If you live outside the EU and buy new, you can apply for a VAT refund too. This link should explain it all (for the UK only):

https://www.gov.uk/government/publi...-shopping-in-the-uk#what-is-tax-free-shopping

If you won't get the full 20% I don't think.

 

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blufinz52

·Mar 10, 2017·Hears dead people, not watch rotors.

What a crazy system 👎

 

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Apollo13

·Mar 10, 2017

Mate the airport VAT refund schemes are a complete joke. They end up taking so much as "operational costs" or whatever. It's seriously infuriating. Still better than retail price 😀. I just wish VAT back actually meant VAT back!

 

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CajunTiger

·Mar 10, 2017

The key is to have it "shipped".
Then you don't pay the VAT.

If you tried on the watch while in the shop and then accidentally wore the it home, they would have to ship the empty box to you.
Im not suggesting you do this, and of course I would never....but I hear it happens.

 

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STANDY

·Mar 10, 2017·schizophrenic pizza orderer and watch collector

Bought some stuff in Denmark and Nederlands last year, claimed Vat back for all at schiphol airport on way out of Europe. Easy to do.

Engagement ring bought had little VAT as it was a antique. ( as above explained )

Few forms had to be filled out but was worth it. Most sellers will go the extra mile to help you get the VAT back

 

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lillatroll

·Mar 11, 2017

I bought my sm300 could axial at retail for 4100 pounds in the uk. After the global refund company took nearly 100 quid off me I was left with 620 pounds. I saw the same watch in goldsmiths at the airport for less than I paid including the vat total amount of 710 pounds. It might be worth just buying it at the airport if it is a model that is easy to find.
The obvious drawback to this is that you might get stopped at the other end and have to pay vat there. If you get stopped and have not declared it, I believe some countries might confiscate your watch, although I am not sure how likely that is.
Your options are:
Buy the watch retail in the UK and take a hit on the refund at the airport. You can always post the box separately.
Buy at the airport and hope you don't get stopped at the other end.
Buy the watch at the airport and pay the duty at the other end.

 

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citizenrich

·Mar 11, 2017

VAT is brilliant in concept.

It's the fairest way to have actual consumers and sellers (producers) pay societal costs.

If you don't like paying VAT, consume less shit.

The concept is brilliant but sometimes execution...not so much.

Ppl will put great effort into avoiding such a high levy on goods

 

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avwatches

·Mar 11, 2017

Spacefruit

The margin scheme is where vat is deducted from the profit.

This amount is not disclosed to the buyer.

So if a watch cost 900 and sells for 1000, the vat due is 20% of profit i.e. £20. Otherwise pre margin scheme there was vat liable in the whole amount of 1000, which would then cost the buyer 1200.

My information might be out of date as I last traded in U.K. 15 years ago. But I think it's still like that.

Not 20% just 16.67%!

 

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Archer

·Mar 11, 2017·Omega Qualified Watchmaker

citizenrich

VAT is brilliant in concept.

It's the fairest way to have actual consumers and sellers (producers) pay societal costs.

It's a regressive tax. It's a particular burden on low income earners, and businesses also (trust me I deal with it every day, with varying rates charged across the country that I have to keep track of and charge my customers accordingly depending on the jurisdiction where they live).

A proper progressive income tax system is actually fairer than VAT. I do agree that the devil is in the details though...in both scenarios.

 

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CajunTiger

·Mar 11, 2017

citizenrich

If you don't like paying VAT, consume less shit.

The OP is in the US and doesn't owe VAT...which is the purpose of the question.

 

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Spacefruit

·Mar 11, 2017·Prolific Speedmaster Hoarder

Archer

It's a regressive tax. It's a particular burden on low income earners, and businesses also (trust me I deal with it every day, with varying rates charged across the country that I have to keep track of and charge my customers accordingly depending on the jurisdiction where they live).

A proper progressive income tax system is actually fairer than VAT. I do agree that the devil is in the details though...in both scenarios.

I was just about to write that - vat is not an optional tax and hits lowest earners hardest.
It is also a strangulation tax, imposed by top down governments enabling them unprecedented levels of supervision.

Compare uk with Hk (which has no vat).
Then look at Singapore which had no vat and then introduced it, reducing trade

 

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STANDY

·Mar 11, 2017·schizophrenic pizza orderer and watch collector

Australia has 10% GST but not on fresh foods.
Buy ingredients for a cake and make it no GST buy a baked cake pay GST
Buy oranges no GST buy sugary orange juice pay GST

Works a treat as you can save a heap if you buy and make most foods yourself.

 

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gatorcpa

·Mar 11, 2017·ΩF InvestiGator

CajunTiger

If you tried on the watch while in the shop and then accidentally wore the it home, they would have to ship the empty box to you.

Not 100% sure you need to do this. A lot of the larger retailers have a way to refund the VAT at the store if you fill out some forms, present a non-EU passport and proof you will be leaving the country within a certain amount of time (airline ticket, etc.) Smaller stores (like the ones that may give you a discount) generally don't have this service, so you'll need to make a decision.

BTW, it works the same in the US for exports. Depending on the state, some vendors do not have to charge sales tax if the item is purchased for use outside the state. The paperwork is pretty onerous, and is usually done only for very high ticket items like artwork, cars, boats, etc. that get delivered to a bonded shipper at a port.

Watches are tough because they are portable. Most jewelers don't bother, but a few stores with a lot of foreign customers might do it.

STANDY

Buy ingredients for a cake and make it no GST buy a baked cake pay GST

Works the same way here in Florida, but not in all states. If you order a sandwich at the supermarket deli counter, there is a special register to ring it up, but that one has to charge tax on everything, even non-taxable items.

Buy the bread, cheese and meat at a regular register and make it yourself, then there is no sales tax.

Strange law.
gatorcpa

 

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trackpad

·Mar 11, 2017

Apollo13

Mate the airport VAT refund schemes are a complete joke. They end up taking so much as "operational costs" or whatever. It's seriously infuriating. Still better than retail price 😀. I just wish VAT back actually meant VAT back!

Agreed. It's a total bait and switch. I don't think anyone would complain about only getting 22% back on a 25% tax...the problem is you get far less. IMO, due to the fact that they outsource this to private companies that are expected to generate a profit.

In any case, they should be barred from marketing it as they do in shops, when the reality is you will only ever get about 65% of the VAT back.

 

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jimmyd13

·Mar 11, 2017

calalum

If I go to England (or another country with a VAT) and buy a watch, when I leave will I be refunded the VAT amount? If not, why? If yes, why don't people do that all the time? What is the VAT on a watch anyway? Do only certain types of businesses join in the VAT refund scenarios? And if I don't get the VAT refund, does the dealer keep the VAT amount or pay it to the government?

Thanks all.

How are you planning to buy the watch? At auction, watches are not subject to VAT. If it is a private sale, then VAT is not applied. If sold through the course of a business, then the business is liable for VAT as @Spacefruit wrote above. You can ask if they will ship the watch outside the EU, in which case VAT is not applicable but your saving might not be as much as you think.