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Spotlight on ...

1 JAN 2021: BREXIT

AND E-COMMERCE

Text: Alan Rhode, Co-Founder Taxmen

From 1 Jan 2021, a new UK VAT reform on inbound distance sales will kick-off.

2C distance selling to the UK with direct shipment For VAT purposes, any supply not exceeding £135 in value will
from overseas – up to £135 be treated as follows:
BFrom 1 Jan 2021, for imports of consumer goods from
outside the UK in individual consignments not exceeding £135 • If an online marketplace (OMP) is involved in facilitating
in value: the sale, they will be deemed, for VAT purposes, to be
making the supply to the UK consumer, which will be
• No inbound customs duty will apply (B2B/B2C); and deemed as taking place in the UK with UK VAT chargeable
• VAT will be collected on the full product value from the accordingly; or otherwise
point of importation to the point of sale. This means that • If an OMP is not involved in facilitating the sale, there will
the goods will pass through a fast-track customs clearance be a supply direct from the seller to the consumer, which
process and VAT will be reported and paid periodically by will be deemed as taking place in the UK and so liable for
the merchant (or the marketplace, in case of marketplace- UK VAT.
facilitated sales); and
• Low-Value Consignment Relief, which relieves import If the consignment has a value exceeding £135, the process will
VAT on consignments of goods valued at £15 or less, will be basically the same as it is now: VAT and any customs duties
be repealed (B2B/B2C). will apply at the border, without the obligation to file periodical
VAT returns. For UK VAT-registered businesses, postponed

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