I have been asked by a client about a business proposal and how the VAT will or could work.
He is a resident in Italy and wants to purchase second hand high end watches from the UK. These he will then sell on in the EU and he is interested in the VAT Margin Scheme.
I have read through VAT Notice 718 on VAT Margin Schemes and it states it is applicable for second hand goods and gives the legal definition, well I think this would cover virtually anything so I would guess it would cover the watches.
Also the watches may come from Hong Kong to the UK and then onto Italy. What would be the VAT implications for this?
Any guidance would be much appreciated.
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Hmmm
Are there a lot of secondhand high end watches rattling about in Hong Hong. The abbreviation MTIC keeps running through my head. I know not why.
There will not be a secondhand scheme, because VAT will be paid on the goods at the point of entry to the EU.
If this is going to be secondhand high end and high volume, I would be inclined to steer clear of acting for what may be a patsy. Was this business idea the clients own idea?
I can understand why MTIC would run through your mind and I am unclear as to the details of supply. He has just asked whether he would be able to run the scheme.
I suspected that VAT would be payable on entry to the UK, so thanks for confirming that.