In an earlier blog we discussed what happens to UK businesses selling goods directly to consumers in the EU.
This time we will look at Non-UK businesses (including from the EU) selling goods to UK consumers in Great Britain (Great Britain being England, Scotland and Wales; the rules for Northern Ireland are different and we will discuss these in a future blog). Because there are some changes coming. EU distance selling no longer applies inwardly as well as outwardly so EU sellers may have to register in the UK in the same way as UK sellers may have to register in the EU. But these new rules apply to any sales of goods to consumers from outside the UK, EU or Non-EU (although there are variations for consumers in Northern Ireland for sales from the EU).
The new rules operate on a consignment threshold not exceeding £135. If the consignment value is over £135 normal import rules apply and either the seller or the customer will have to pay import VAT or duty in the normal way. If the seller opts to become importer of record and is not already registered for VAT in the UK they will have to register to make UK taxable supplies to GB consumers (but, of course, they can reclaim the input tax).
If the consignment does not exceed £135 then the change is that VAT will be due at point of sale rather than at point of importation. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments. The new arrangements will also involve the abolition of Low Value Consignment Relief, which relieves import VAT on consignments of goods valued at £15 or less. Online marketplaces (OMPs), where they are involved in facilitating the sale, will be responsible for collecting and accounting for the VAT. For goods sent from overseas and sold directly to UK consumers without OMP involvement, the overseas seller will be required to register and account for the VAT to HMRC.
Business to business sales not exceeding £135 in value will also be subject to the new rules. However, where the business customer is VAT registered in the UK and provides its valid VAT registration number to the seller, the VAT will be accounted for by the customer by means of a reverse charge. The changes will not apply to consignments of goods containing excise goods or to non-commercial transactions between private individuals. Existing rules will continue to apply for these transactions. In addition, for sales of goods by overseas sellers, where the goods are already in the UK at the point of sale, HMRC will move the responsibility for accounting for VAT from the overseas seller to the OMP that facilitates the sale.
This will result in many overseas sellers (both EU and Non-EU) who are not currently registered in the UK having to register to sell goods directly to GB consumers.
This time we will look at Non-UK businesses (including from the EU) selling goods to UK consumers in Great Britain (Great Britain being England, Scotland and Wales; the rules for Northern Ireland are different and we will discuss these in a future blog). Because there are some changes coming. EU distance selling no longer applies inwardly as well as outwardly so EU sellers may have to register in the UK in the same way as UK sellers may have to register in the EU. But these new rules apply to any sales of goods to consumers from outside the UK, EU or Non-EU (although there are variations for consumers in Northern Ireland for sales from the EU).
The new rules operate on a consignment threshold not exceeding £135. If the consignment value is over £135 normal import rules apply and either the seller or the customer will have to pay import VAT or duty in the normal way. If the seller opts to become importer of record and is not already registered for VAT in the UK they will have to register to make UK taxable supplies to GB consumers (but, of course, they can reclaim the input tax).
If the consignment does not exceed £135 then the change is that VAT will be due at point of sale rather than at point of importation. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments. The new arrangements will also involve the abolition of Low Value Consignment Relief, which relieves import VAT on consignments of goods valued at £15 or less. Online marketplaces (OMPs), where they are involved in facilitating the sale, will be responsible for collecting and accounting for the VAT. For goods sent from overseas and sold directly to UK consumers without OMP involvement, the overseas seller will be required to register and account for the VAT to HMRC.
Business to business sales not exceeding £135 in value will also be subject to the new rules. However, where the business customer is VAT registered in the UK and provides its valid VAT registration number to the seller, the VAT will be accounted for by the customer by means of a reverse charge. The changes will not apply to consignments of goods containing excise goods or to non-commercial transactions between private individuals. Existing rules will continue to apply for these transactions. In addition, for sales of goods by overseas sellers, where the goods are already in the UK at the point of sale, HMRC will move the responsibility for accounting for VAT from the overseas seller to the OMP that facilitates the sale.
This will result in many overseas sellers (both EU and Non-EU) who are not currently registered in the UK having to register to sell goods directly to GB consumers.
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