Is this UK business in the wrong by charging me Finnish VAT?
February 10, 2022 3:39 AM Subscribe
Looking for input from people somewhat familiar with the tax rules of the UK and/or the EU, specifically around value added tax and the Import One-Stop Shop (IOSS) system. The full story behind the click:
I live in Finland, and bought a few bandsaw blades from a UK merchant. The blades cost £38.51 in total. Shipping was £10 and they charged me the Finnish VAT of 24%, £11.64, for a total of £60.15. Non-EU merchants charging the VAT rate of the EU country they're selling to is pretty standard nowadays, so I thought nothing of it. Saves me from paying it when the package arrives in customs. (The receipt literally says, "FI VAT 24%".)
A few days later, I look at the Finnish postal service package tracking mobile app, and it lets me know that I'll be responsible for paying VAT when the package arrives. Confused, I contact their customer service, and they tell me that the merchant has not included an IOSS code in the shipment information, and that I should contact them to get it, so I can avoid paying VAT again. So I do, and the shop answers with: "we're not currently a part of the IOSS system".
*record scratch*
I contacted the Finnish customs officials, and they told me that no, the merchant should not be charging me VAT if they're also not handling the IOSS side of things. This europa.eu page seems to confirm that.
I've contacted the merchant multiple times to ask them to refund me the VAT they charged so I don't get double-charged, and they seem to be completely mischaracterizing the situation based on their replies, through either obstinance or ignorance or both, like they don't even understand what the VAT charge is about (saying something like "we can't discount our products", I mean WTF, I didn't ask you to, you don't get to keep the VAT money, you know that right?)
I'm left feeling almost gaslit by the situation. As far as I know, VAT is added to the price of the item once, and not twice, like what's about to happen. We're not talking about a lot of money here, but at this point it's mainly about the principle of the thing. Am I misunderstanding something here, or is the merchant?
I live in Finland, and bought a few bandsaw blades from a UK merchant. The blades cost £38.51 in total. Shipping was £10 and they charged me the Finnish VAT of 24%, £11.64, for a total of £60.15. Non-EU merchants charging the VAT rate of the EU country they're selling to is pretty standard nowadays, so I thought nothing of it. Saves me from paying it when the package arrives in customs. (The receipt literally says, "FI VAT 24%".)
A few days later, I look at the Finnish postal service package tracking mobile app, and it lets me know that I'll be responsible for paying VAT when the package arrives. Confused, I contact their customer service, and they tell me that the merchant has not included an IOSS code in the shipment information, and that I should contact them to get it, so I can avoid paying VAT again. So I do, and the shop answers with: "we're not currently a part of the IOSS system".
*record scratch*
I contacted the Finnish customs officials, and they told me that no, the merchant should not be charging me VAT if they're also not handling the IOSS side of things. This europa.eu page seems to confirm that.
I've contacted the merchant multiple times to ask them to refund me the VAT they charged so I don't get double-charged, and they seem to be completely mischaracterizing the situation based on their replies, through either obstinance or ignorance or both, like they don't even understand what the VAT charge is about (saying something like "we can't discount our products", I mean WTF, I didn't ask you to, you don't get to keep the VAT money, you know that right?)
I'm left feeling almost gaslit by the situation. As far as I know, VAT is added to the price of the item once, and not twice, like what's about to happen. We're not talking about a lot of money here, but at this point it's mainly about the principle of the thing. Am I misunderstanding something here, or is the merchant?
Response by poster: > It does say that you can end up being charged VAT twice, but in that case it would be UK VAT, and then Finnish VAT, not Finnish VAT twice.
Is this situation eligible for a refund of the UK VAT? At least when we visited Australia, at the airport we were given tax refunds of the items we bought locally before we left for home. Are the rules different for the UK and/or for e-commerce sales?
posted by jklaiho at 4:07 AM on February 10, 2022
Is this situation eligible for a refund of the UK VAT? At least when we visited Australia, at the airport we were given tax refunds of the items we bought locally before we left for home. Are the rules different for the UK and/or for e-commerce sales?
posted by jklaiho at 4:07 AM on February 10, 2022
Best answer: Yep, the rules are different for UK e-commerce and refunds are not available.
It would have been OK, albeit annoying and avoidable, for the company to have charged you UK VAT, and for that to have gone to the UK government, but they're clearly just confused – perhaps this is because they may have been used to shipping B2B within the EU, where you do charge VAT at the rate where the recipient company's registered, but obviously why they're wrong isn't relevant to your needs.
posted by ambrosen at 4:55 AM on February 10, 2022
It would have been OK, albeit annoying and avoidable, for the company to have charged you UK VAT, and for that to have gone to the UK government, but they're clearly just confused – perhaps this is because they may have been used to shipping B2B within the EU, where you do charge VAT at the rate where the recipient company's registered, but obviously why they're wrong isn't relevant to your needs.
posted by ambrosen at 4:55 AM on February 10, 2022
I don't have a specific answer, but as a VAT-registered UK sole trader I can say that the situation post-Brexit is hellishly complicated for UK businesses, that it's squarely our government's fault, and that UK businesses' customers including you are going to suffer as a result and I'm really sorry :(
posted by altolinguistic at 9:03 AM on February 10, 2022 [3 favorites]
posted by altolinguistic at 9:03 AM on February 10, 2022 [3 favorites]
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