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.