I've searched the forum for an answer, and I've not seen this question asked before. Hope someone can advise.
Company A in UK sells refurbished computers. Company B (my company) is also based in UK. Both companies have permanent UK addresses and are VAT registered. Neither company has any registration in EU.
I am the director of company B, and need to buy and ship a computer (£5000) from A to my address of residence in EU. The computer is for to be used for business purposes, and is not for resale.
Company A provides 2 choices how to make the sale. My normal preference is choice 1 (business to business)
1) Sell business-to-business, from company A to company B. Company A will arrange shipping to destination in EU using UPS. As a private person in EU, I will need to pay import charges when collecting parcel (approximately 20%, or £1000). My company will reclaim the VAT amount on UK VAT return later. Cost of purchase to company B= £5000-£1000VAT + £1000 import charges = £5000.
2) Sell business-to-customer, from company A to me personally. Company A will arrange shipping to destination in EU using UPS. As a private person in EU, I will need to pay import charges when collecting parcel (approximately 20%, or £1000). I will pass this expense onto my company. Cost of purchase to company B= £4000+ £1000 import charges = £5000.
What I cannot understand is that this purchase only costs £4000 within the UK (no import charges) between UK based businesses. In particular, the computer is sold from A to B, and (in my opinion) what is happening is that UK company B is shipping its own asset (purchased from A) to an address in the EU for business purposes. The only reason the computer is leaving the UK, is that due to COVID travel restrictions, the director of company B cannot currently work in the UK.
Is there any scenario where import charges can be avoided, on the basis that the UK company is just shipping it's own property to an address in the EU?
I appreciate your comments.
Scott
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