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UK orders after Brexit

UK orders after Brexit

The UK’s HMRC has changed the import VAT on e-commerce rules for sellers and marketplaces from 1 January 2021. This follows the UK leaving the EU VAT regime after 31 December 2020.

1) For orders not exceeding £135

  • Imported goods consignments passing through UK customs border not exceeding £135 are subject to a new VAT regime.
  • For these transactions, UK and non-UK resident sellers must charge sales VAT though their website checkout.
  • The VAT is then paid through a regular UK VAT return by the seller.
  • The £135 threshold is based on the intrinsic value of the goods, which excludes separate transport, insurance of other import taxes. It is also the UK customs exemption threshold.
  • If the customer is a UK VAT registered business, they may provide the seller with their VAT number and EORI number for zero-rating. The UK customer then uses the reverse charge mechanism to report the VAT due.

2) For orders exceeding £135

  • When the customs value of the consignment exceeds £135, the consignment will not be subject to the new measure. 
  • Supply VAT should not be charged by the seller and import VAT will be chargeable at the border by the carrier.
  • The buyer will be contacted by the carrier who will provide them with a payment gateway to pay the import VAT.
  • If the buyer declines to make the payment of the import VAT, the consignment is returned to the sender.
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