Brexit Guides - B2C supplies after 1 January 2021 (goods arriving in the UK)

10th September 2020

During the transitional period it has been possible to send goods to consumers from the EU to the UK and from the UK to the EU without any requirement for them to pass through a customs barrier. As a result it has been possible for VAT to be accounted for by the seller either at their home rate or through a distance selling registration in the member state of the customer.

From 1 January 2021 this will no longer be possible.

Goods outside the UK at the point of sale

  • The default position is that all goods arriving in the UK after 1 January 2021 from both the EU and the rest of the world will be subject to import VAT and potential customs duty even where the goods are intended for private consumer customers.
  • However, HMRC have designed a new system that can be used by sellers outside the UK to pay import VAT and customs duty in advance on goods consignments where the value of the sale to the consumer is less than £135. Further information can be found at this link: https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021
  • £135 value excludes transport and insurance unless included in the price and any other taxes or charges and applies to full value of consignment not single items.
  • Online market places (OMP) involved in the facilitating the sale will be responsible for collecting and accounting for VAT under the scheme
  • If no OMP is involved, the overseas seller will need to register and account for the VAT to HMRC.
  • B2B sales are also affected but if the UK VAT number is known reverse charge VAT can be accounted for by the buyer of the goods.
  • The new scheme will not apply to supplies of goods subject to excise duty or non commercial transactions between private individuals where existing rules will continue to apply.
  • Where the goods are in UK when they are sold, either the OMP or the seller will be responsible for accounting for VAT.
  • Although customs declarations will no longer be required for VAT purposes customs declarations will still be required for non fiscal purposes, but a number of facilitations (eg bulk declarations and reduced data sets) will be available.
  • Goods from Jersey and Guernsey are not included as they are covered by a separate Import VAT Accounting Scheme.

Goods inside the UK at the point of sale

In the case of goods which have been imported into the UK, VAT and duty will already have been paid, but there are new rules which will apply when goods of this kind are sold by an online market place.

Where the owner of the goods which have been imported is based outside the UK and the goods are sold to UK consumers the OMP will be responsible for accounting for VAT on the sale of the goods in the UK.

https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021

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