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Where Taxpayers and Advisers Meet

refund of VAT on an internet purchase from a non-EU state

myron
Posts:4
Joined:Mon May 03, 2010 1:40 pm
refund of VAT on an internet purchase from a non-EU state

Postby myron » Mon May 03, 2010 2:25 pm

A similar case has been brought up before on here at least on one occasion, but I'd like to do so again with a more specific question.

I am a resident of a non-EU state who has made an online purchase from a UK retailer. I have made my own arrangements for the delivery of the purchased goods to the country of my residence by having the retailer ship them to a UK-based freight forwarder of my choice, who then shipped them to me. As soon as the goods were delivered to the freight forwarder's warehouse, I asked the retailer for a refund of VAT, to which he responded that, because they hadn't exported anything (as they had shipped to a UK address), no such refund should have been issued.

Now, under UK VAT law as I understand it, this transaction qualifies as an indirect export and, therefore, the VAT that I have paid on it must be be zero-rated, or refunded to me, subject to documentary evidence of export, such as a waybill, for example, and both such export and submitting of such evidence occurring within 3 months after the purchase. I have explained these points to the retailer and provided him with a copy of the waybill, only to be completely ignored this time.

My question is: given the tactics the retailer is obviously using (non-cooperation), what can I do to get my VAT refund, since I am clearly entitled to one by law?

Please share your thoughts on this, they will be much appreciated.

Eamon McNicholas
Posts:73
Joined:Wed Aug 06, 2008 3:37 pm

VAT Incorrectly Charged on Export From EU

Postby Eamon McNicholas » Tue May 04, 2010 12:53 pm

As an export to a non-EU consumer the item(s) would appear to be zero-rated for VAT but it appears you have been charged standard-rated VAT.

The obstruction from the retailer may just be them not understanding the position. Then again maybe not.

First step is to double-check the "VAT" charged is not covered in the retailer's contractual small print by something like 'price includes VAT if any'.

Eamon Mc Nicholas
Tax Barrister

www.EamonMcNicholas.com

[The above is not to be taken nor used as specific advice]

Generix
Posts:2532
Joined:Wed Aug 06, 2008 3:41 pm

Re: VAT Incorrectly Charged on Export From EU

Postby Generix » Tue May 04, 2010 1:10 pm

As an export to a non-EU consumer the item(s) would appear to be zero-rated for VAT but it appears you have been charged standard-rated VAT.

The obstruction from the retailer may just be them not understanding the position. Then again maybe not.

First step is to double-check the "VAT" charged is not covered in the retailer's contractual small print by something like 'price includes VAT if any'.

Eamon Mc Nicholas
Tax Barrister

www.EamonMcNicholas.com

[The above is not to be taken nor used as specific advice]
Indeed - most retailer state in their terms that prices are "VAT inclusive where applicable".

If it was a large retailer chain then its likely they operate a retail export scheme, if so try getting in touch with head office and speaking to their tax department.
Do you adore to transfer your artistic and inventive qualities to renovate a part type? Perhaps your friends who tour your sanctuary head remarks about want they could levy you to change their premises.

myron
Posts:4
Joined:Mon May 03, 2010 1:40 pm

Re: refund of VAT on an internet purchase from a non-EU state

Postby myron » Tue May 04, 2010 2:07 pm

Eamon, Generix, thank you both..

The retailer quoted his prices inclusive of VAT, and I was well aware of that as I was making the purchase. However, upon receipt of the goods and inspection of the invoice by the freight forwarder, the latter informed me that the transaction was not subject to VAT and that I needed to ask the retailer for a VAT-free invoice and a refund of the VAT amount. I did but, as I posted before, the retailer was not quite in a cooperative mood, not even after I produced a clear documentary evidence of that it was, in fact, export..

I will try to see if they are part of any chain and if this is the case, I will write to their HQ, but, as far as I know, they are a single-location operation that retails online as well..

I mean, it wasn't a significant sum by any measure, it's just that I struggle to understand where the retailer is coming from..

Many thanks to all.

Generix
Posts:2532
Joined:Wed Aug 06, 2008 3:41 pm

Re: refund of VAT on an internet purchase from a non-EU state

Postby Generix » Tue May 04, 2010 2:30 pm

Eamon, Generix, thank you both..

The retailer quoted his prices inclusive of VAT, and I was well aware of that as I was making the purchase. However, upon receipt of the goods and inspection of the invoice by the freight forwarder, the latter informed me that the transaction was not subject to VAT and that I needed to ask the retailer for a VAT-free invoice and a refund of the VAT amount. I did but, as I posted before, the retailer was not quite in a cooperative mood, not even after I produced a clear documentary evidence of that it was, in fact, export..

I will try to see if they are part of any chain and if this is the case, I will write to their HQ, but, as far as I know, they are a single-location operation that retails online as well..

I mean, it wasn't a significant sum by any measure, it's just that I struggle to understand where the retailer is coming from..

Many thanks to all.
The retailer just sees additional profit...

They (are likely to) state in their terms "inclusive of VAT, where applicable" to protect their position in these types of circumstances.

They will argue the price you paid, lets say £50 would be £50 whether or not VAT was applicable.

In the case of an indirect export no VAT is applicable (or is applicable at 0%) and the price remains at £50.

Of course this might not be the case, and you may well just be speaking to someone who has no idea of how it all works.
Do you adore to transfer your artistic and inventive qualities to renovate a part type? Perhaps your friends who tour your sanctuary head remarks about want they could levy you to change their premises.

myron
Posts:4
Joined:Mon May 03, 2010 1:40 pm

Re: refund of VAT on an internet purchase from a non-EU state

Postby myron » Tue May 04, 2010 2:50 pm

The retailer just sees additional profit...

They (are likely to) state in their terms "inclusive of VAT, where applicable" to protect their position in these types of circumstances.

They will argue the price you paid, lets say £50 would be £50 whether or not VAT was applicable.

In the case of an indirect export no VAT is applicable (or is applicable at 0%) and the price remains at £50.

Of course this might not be the case, and you may well just be speaking to someone who has no idea of how it all works.
So, effectively, the retailer reserves the right of price discrimination against customers not subject to VAT, by the amount of VAT.. How could this be legal in this day and age, in the EU of all places?

Generix
Posts:2532
Joined:Wed Aug 06, 2008 3:41 pm

Re: refund of VAT on an internet purchase from a non-EU state

Postby Generix » Tue May 04, 2010 4:23 pm

The retailer just sees additional profit...

They (are likely to) state in their terms "inclusive of VAT, where applicable" to protect their position in these types of circumstances.

They will argue the price you paid, lets say £50 would be £50 whether or not VAT was applicable.

In the case of an indirect export no VAT is applicable (or is applicable at 0%) and the price remains at £50.

Of course this might not be the case, and you may well just be speaking to someone who has no idea of how it all works.
So, effectively, the retailer reserves the right of price discrimination against customers not subject to VAT, by the amount of VAT.. How could this be legal in this day and age, in the EU of all places?

In retail, the customer is always right. So if they are big enough to be worried about the impacts of any such bad press then they are likely to refund the VAT. (Larger chains tend to operate teh retail export scheme)

If they are a small one shop operation then they may be of the opinion that you've now left the country and that you have little recourse.

Or maybe they just don't understand how VAT works.
Do you adore to transfer your artistic and inventive qualities to renovate a part type? Perhaps your friends who tour your sanctuary head remarks about want they could levy you to change their premises.

myron
Posts:4
Joined:Mon May 03, 2010 1:40 pm

Re: refund of VAT on an internet purchase from a non-EU state

Postby myron » Tue May 04, 2010 4:49 pm

I wonder if I could claim the refund directly from HMRC or, if worst comes to worst, if there is some oversight authority where I could file a complaint, as taking the retailer to court will probably make little sense because of the insignificance of the amount..


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