An online petition on the UK Government’s website, which aims to have the VAT rate on all second hand goods to be treated the same way as art and collectibles, is almost half way to its target of 10,000 signatures.
The petition was started by Mike Viney from Vine Auctioneers, who says the change in VAT is needed to save the watch trading community in this country.
The petition demands a change in policy that would: “Allow second hand goods to be imported at the reduced rate of 5% VAT, in the same way Art and Collectibles are, and allow for them to be bought and sold under the VAT Margin scheme. This way the second hand goods trade will not be so drastically effected by the new Brexit trade agreement”.
The margin scheme is an EU initiative that means VAT is only charged on the profit generated from the sale of second hand goods. Since January 1, VAT is charged on the full price of the watch, irrespective of what it cost to acquire it. It means the full 20% is charged every time the watch changes hands, making watches sold from the UK into EU countries more expensive and uncompetitive.
“It’s a real kick in the teeth particularly since HMRC have better rules in place for Art and Collectibles where they offer a reduced rate of 5% and these can still be sold on the margin scheme, including the 5% as part of your cost — currently not the case for second hand good imports, nor do watches fall under the HMRC definition of collectibles,” Mr Viney argues.
The petition currently has 4,299 signatures. If it reaches 10,000 signatures the government would have to respond. At 100,000 signatures it will be considered for debate in parliament.