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Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have just sold used musical instruments through a UK dealer.

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I have just sold used musical instruments through a UK dealer. (a) The dealer charges 20% sales commission + 20% VAT on the commission. (b) There are also repair costs involved, also with 20% VAT. The question is, can I as a foreign citizen (Iceland) reclaim the 20% VAT of both or either of these services? If so, how do I go about it?


Thanks for your question

You will need to ho back to the seller - and ask whay they have charged your VAT on the commision, as you are a NON EU Resident.

I would suggest the resposne may well be, that the seller (who IS based in the EU) has charged this as being the place of supply. This being the case you will not be due a refund back on the VAT charged.

And the repair costs would also fall into this position, as the charger of VAT then went onto sell your items for you (so had them also pysically in their presence)

But only the seller could advise why they made the VAT charges. For me to advise further I would need to know where they are situated and through what mechinism they sold the instruments (i.e such as ebay)



Customer: replied 3 years ago.

Thank you for the answer. Just a little more clarification:

When I asked the dealer wherther I would be exempted from the VAT as a resident of a non-EU country (Iceland is not in the EU) theyr answer was: “The VAT is applicable to the 20% commission and repairs on the sale as they are being sold in the UK.“ The firm is a London based musical instrument shop (called Howarth of London) who sells new and reconditioned used instruments (that they themselves do in location). In short, I shipped the instruments to them, they repaired them, and sold them at their shop.

Hope this info is sufficient for a final verdict!

Regards, Thorir

Hi Thorir

Then its correct that VAT was charged as the instruments were both repaired and sold in the UK (place of supply) and you have no recourse for a refund as you are not a business but an individual having made this sale

Sorry the news is not more favourable - let me know if I can be of any further assistance, but it would be appreciated if you could rate the level of service I have provided.



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