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VAT Refund for U.S. resident purchasing goods from the U.K.

VAT Refund for U.S. resident purchasing goods from the U.K.

Old Sep 19, 11, 6:06 am
  #1  
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VAT Refund for U.S. resident purchasing goods from the U.K.

I'm not really familiar with how VAT works, I'm in the US and about to purchase something from UK. The merchant says they do not refund VAT but I can request a refund once delivered.

Is that true, if so how do I go about getting it refunded?
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Old Sep 19, 11, 9:35 am
  #2  
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As your question is probably best posed in the Travel->U.K. forum, please follow as the thread moves to there. Ocn Vw 1K, Moderator, TravelBuzz.
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Old Sep 19, 11, 11:09 am
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Originally Posted by precision80 View Post
I'm not really familiar with how VAT works, I'm in the US and about to purchase something from UK. The merchant says they do not refund VAT but I can request a refund once delivered.

Is that true, if so how do I go about getting it refunded?
As far as I'm aware, you can only re-claim the VAT if you make a purchase in person when visiting the UK. Check out the HMRC rules here, specifically sections 2.3 "What conditions apply to the scheme?" and 2.4 "Who can buy goods under the scheme?"
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Old Sep 19, 11, 2:06 pm
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Originally Posted by britenbsas View Post
As far as I'm aware, you can only re-claim the VAT if you make a purchase in person when visiting the UK. Check out the HMRC rules here, specifically sections 2.3 "What conditions apply to the scheme?" and 2.4 "Who can buy goods under the scheme?"
For goods delivered by mail VAT is not chargeable if delivery is made to an address outside the European Union (I know this because of my Channel Islands connections - if I order goods for delivery there I don't get charged VAT)

The HMRC informtion is somewhat misleading in that respect. It is correct that you can't reclaim VAT on items ordered over the Internet and delivered to a UK address (which is what they are referring to - but they aren't very clear about it). There is no VAT on items delivered outside the EU
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Old Sep 19, 11, 2:19 pm
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Originally Posted by Aviatrix View Post
Originally Posted by britenbsas View Post
As far as I'm aware, you can only re-claim the VAT if you make a purchase in person when visiting the UK. Check out the HMRC rules here, specifically sections 2.3 "What conditions apply to the scheme?" and 2.4 "Who can buy goods under the scheme?"
For goods delivered by mail VAT is not chargeable if delivery is made to an address outside the European Union (I know this because of my Channel Islands connections - if I order goods for delivery there I don't get charged VAT)
Actually, it's the European VAT area which is what maters, not the EU. There are places which are part of the EU but outside the VAT area, and places which are not part of the EU but are part of the VAT area.

It is correct that you can't reclaim VAT on items ordered over the Internet and delivered to a UK address (which is what they are referring to - but they aren't very clear about it).
Well, you can't reclaim VAT on such items under the 'retail export scheme', but there are other ways which can sometimes be open to you.

There is no VAT on items delivered outside the EU
indeed. If the OP's delivery address is outside the VAT area, the should not be paying VAT.
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Old Sep 20, 11, 2:07 am
  #6  
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It appears that the merchant is either very ill informed or unscrupulous. This is very standard stuff (comparable to ' NY residents add X% sales tax') when ordering in the US (Is that still the case with internet sales? It certainly was with postal sales in the - distant - past)
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Old Sep 20, 11, 6:37 am
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Originally Posted by thijsseh View Post
It appears that the merchant is either very ill informed or unscrupulous. This is very standard stuff (comparable to ' NY residents add X% sales tax') when ordering in the US (Is that still the case with internet sales? It certainly was with postal sales in the - distant - past)
I believe this is the correct case. When I went to check out online the vat wasn't deducted. When I contacted the merchant they told me they don't refund vat because they offer free shipping. They then told me that I can apply for a vat refund once I receive the item.

I said I'd like to pay for shipping and have the vat refunded, still haven't heard back on that one.

Shame as I don't think I'll be buying from them anyways, they don't seem to be very honest.
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Old Sep 21, 11, 12:05 am
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Originally Posted by thijsseh View Post
This is very standard stuff (comparable to ' NY residents add X% sales tax') when ordering in the US (Is that still the case with internet sales? It certainly was with postal sales in the - distant - past)
Typically, this only applies when they have a business presence in certain states. If your HQ is in New York and your warehouse is in Boston, you charge NY and MA residents sales tax. But being internet-based has given lots of businesses the flexibility to locate where they don't have to charge anyone anything, so it's less common than it used to be in the postal days.

Not to be a killjoy, but remember that buying mail order - even from overseas - technically means you still have to pay sales tax to your home state anyway.

I certainly don't want 20% VAT on everything I buy, but it does make things a little easier.
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Old Sep 24, 11, 7:45 am
  #9  
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UK-based online merchants are not required to charge VAT on purchases shipped outside the EU. Some will charge the same price irrespective, and of those, some will still pay away the VAT to HMRC, others will pocket it. As mentioned above, most US states say you're supposed to pay use tax (not sales tax, but usually the same rate) on your tax return. Few people bother.

You cannot, however, reclaim VAT from HMRC on items shipped out of the EU.
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