Brexit, EU and used watches

Watches from Other EU countries
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Brexit, EU and used watches

Post by koimaster » January 15th 2021, 9:25pm

In the case of the free trade agreement signed by Britain and the European Union last year, businesses trading in second hand goods are being hit with a change in taxation rules that puts UK-based operations at a massive disadvantage to competitors on the Continent when selling goods into the EU.

The issue relates to a little-known regulation known as the margin scheme. This allows any business based within the EU to pay sales taxes, such as our 20% VAT, on just the profit margin of the trade.

For example, if a business like Watchfinder bought a pre-owned Rolex Submariner for £10,000 and sold it for £15,000, VAT would only be applied to the profit of £5,000, — a £1000 tax bill.

Since January 1, the UK is no longer included in the margin scheme, so the same watch selling for £15,000 would now have £3,000 of VAT added.

Since all remaining 27 member states of the EU still offer the margin scheme, it means a customer buying the aforementioned Rolex from any trader based in the EU will pay £16,000 for the watch, but a UK-based business selling to an EU-based customer would have to charge £18,000.

The issue is reversed for EU-based operators such as Chronext selling into the UK. ... SgwRYteQ5g


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