Wiggle VAT rate is 20%?

[yello]

I've just received an order from Wiggle (my first for many months). The VAT rate is shown on the invoice as 20%! Not right surely!

If someone has a recent Wiggle invoice, can you have a quick look at what VAT rate is showing please?

 

[ChrisKH]

Clearly not. It could say 20% but be calculating as 15%. Does the invoice not break it down between net, vat & gross? VAT figure should be the net figure before vat x 15%.
If it is 20%, ask them for a 5% refund and a bag of sweeties.

 

[yello]

Does the invoice not break it down between net, vat & gross?

Yes it does. And the vat is 20% of the net price.

I think that Uncle Mort may have got it though. I live in France, so Wiggle have displayed the VAT rate as 20%, maybe 19.6% wouldn't fit their display format! It's the first time I've had any company actually do that; St Johns Street Cycles, Parkers, Probikekit, HubJub all charged VAT at UK rates. Even Wiggle did once so they must have changed their policy process recently.

In fairness, the vat inclusive price is the same as displayed on the web so it looks like Wiggle have simply calculated the net price back, deducting the 19.6% off of the gross.

Edit: I also note that their invoice has 'France - VAT no pending' on it. Maybe related??

 

[andy_wrx]

It's 'VAT & EC Distance Selling Regulations' or something similar.

If a company is selling B2C (i.e. retail, with VAT-inclusive prices) and sells enough (I think it's a threshold of about £67,000 or something) into another EC-member country, they need to register for VAT in that other EC-member country and charge VAT at the rates applicable in that country, rather than their home-country VAT rates.

If however you sell below that threshold to that other EC-country, you charge your own local VAT rates

More on HMRC's website

The rules are intended to combat distortion of trade and unfair competition by transferring the place of supply to the Member State in which the customer receives the goods. Without this, cross-border supplies to private individuals would be subject to VAT in the Member State of dispatch as a domestic supply. With the variations in VAT rates between Member States this could encourage businesses selling mainly to private individuals (for example mail order companies) to relocate their businesses to Member States with the lowest rates of domestic VAT.

http://www.hmrc.gov.uk/manuals/vatposgmanual/VATPOSG3510.htm
http://www.hmrc.gov.uk/manuals/vatposgmanual/VATPOSG3530.htm
http://www.hmrc.gov.uk/vat/reg-how-to.htm#6
- bung 'Distance Selling' into the search box for more, but I warn you it's not exactly gripping...

For you, if you've paid the normal UK price which the website showed and yet the invoice shows 20% (if it shows 20% but is 19.6% it might not strictly be legal...), then you've not lost-out, you've paid the same amount, or even got a better deal than you would have done from a French shop, as Uncle Mort says above.
Wiggle have lost-out however, in that they are liable to HMRC (or maybe French equivalent, I forget whether UK Treasury benefits or the country of delivery) for the 19.6%, so they've made less on the item (only taken 80.4% rather than 85%).
It'll all come out in their Intrastat/EC Sales List/VAT Returns.

What they should do I guess is ask where you want delivery to (because it's delivery address, not nationality of customer, or your invoice/home address if different to delivery address, etc that matters) and then come-up with a different set of VAT-inc prices depending where you want delivery, e.g £10 ex-VAT => £11.50 in UK or £11.96 in France.

Presumably the other retailers charging UK VAT were either below the threshold, or just plain don't know about it, or maybe their computer systems aren't sophisticated enough to cope with it
(guess what I do for a living...)

 

[4F]

It's 'VAT & EC Distance Selling Regulations' or something similar.

If a company is selling B2C (i.e. retail, with VAT-inclusive prices) and sells enough (I think it's a threshold of about £67,000 or something) into another EC-member country, they need to register for VAT in that other EC-member country and charge VAT at the rates applicable in that country, rather than their home-country VAT rates.

If however you sell below that threshold to that other EC-country, you charge your own local VAT rates

I think however to do that the invoice issued from Wiggle should have to show a French address to apply the French vat rate.

 

[yello]

If however you sell below that threshold to that other EC-country, you charge your own local VAT rates

That explains it then, thanks Andy.

As mentioned, the Wiggle invoice has 'French VAT # pending' on it. So I guess they are now selling above the threshold. Wiggle have since confirmed to me that they were charging VAT at French rates but that they displayed it as 20% rather than 19.6%.

 

[ChrisKH]

I didn't even look where you were. Bearing in mind I inspect every international invoice that goes out of my organisation that's pretty bad of me.