It was on Christmas Eve that Britain’s vintage watch dealers learnt their traditional trading route had been, in effect, cut off. Just as they were sending out their final festive orders, many to the EU, the news came that they had been left out of the post-Brexit value added tax margin scheme.
This scheme has long been vital to the UK’s pre-owned watch market, allowing dealers who survive on wafer-thin profit margins to pay a reduced VAT rate on profit, rather than a product’s total value. Second-hand watch dealers in the UK have historically done the bulk of their sourcing in mainland Europe because it offers a wealth of supply and lower prices.
But this way of doing business is now under threat, as watches bought from the EU from January 1 are subject to a 20 per cent import tax. Once paid, this excludes the goods from the margin scheme, meaning dealers then have to charge 20 per cent VAT on the full price of the watch, making it more expensive for the consumer and less lucrative for the dealer.
Mike Viney, an independent dealer and founder of Vine…
