Your Brexit questions answered
From 1st January 2021 – there have been some changes to the UK and EU border on customs. We’ve compiled a list of your most pressing questions regarding the Brexit changes as well as some other useful resources.
If I’m selling online to customers throughout the EU, do the EU VAT distance selling regulations still apply?
Any sales going to private consumers are classed as ‘exports’ and zero-rated for VAT purposes.
Importer of record – You need to decide who will be the ‘importer of record’ (the importer of record is liable for the VAT owed) – you or your customer? If it is you, you will require a VAT registration in place in the country of arrival in order to account for the VAT.
EU EORI – If you are the importer of record, you will also require an EU EORI (Economic Operator Registration Identification Number), this identifies you as the importer to the EU customs authorities. After Brexit, you will require both a UK and EU EORI number if you are importing into either. We can help you obtain both. We can help you to apply for an EORI number.
Fiscal representation – In some EU countries, they require a non-EU country to use a Fiscal Representative. The Fiscal Representative is jointly liable for any VAT owed and may require bank guarantees and increased fees. Speak to us at SimplyVAT.com to find the best options for your business.
Do I need an EORI number?
You need to decide who will be the ‘importer of record’ (the importer of record is liable for the VAT owed) – you or your customer? If it is you, you will require a VAT registration in place in the country of arrival in order to account for the VAT.
If you are the importer of record, you will also require an EU EORI (Economic Operator Registration Identification Number), this identifies you as the importer to the EU customs authorities. After Brexit, you will require both a UK and EU EORI number if you are importing into either. We can help you obtain both. Learn more »
In some EU countries, they require a non-EU country to use a Fiscal Representative. The Fiscal Representative is jointly liable for any VAT owed and may require bank guarantees and increased fees. Speak to us at SimplyVAT.com to find the best options for your business. Learn more »
I’m selling on a marketplace to EU consumers, should I be worried about my orders?
Delivery times may lengthen due to the paperwork that comes with being outside the European Union’s Single Market and Customs Union. Marketplaces are reviewing their logistics operation in order to work within the new border controls being introduced. Amazon, for example, has released the following information for its third-party sellers.
You may wish to use a Fulfilment Centre inside the EU in order to still enjoy the distance selling regulations. We have partners that offer these fulfilment services that would be pleased to help.
I heard that the UK tax authority has made the marketplaces account for the VAT on my sales? What does this mean for me?
HMRC issued a notice that declared marketplaces (eg. Amazon, eBay) will become liable for the VAT owed by its third-party sellers. Sellers trading through online marketplaces can no longer be accountable for the VAT.
These new regulations will apply when the following is true: goods are owned by a seller who is based outside the UK; good are owned by a seller who is based outside the UK; the goods are located in the UK at the point of sale; the sale to the UK customer is facilitated by an online marketplace; the supply is not to a (VAT registered) business.
The seller operating through the online marketplace needs to VAT register in order to zero-rate the goods.
For non-UK sellers who bring stock into the UK for onward sale to private consumers via their own website and not via an online marketplace – the rules remain unchanged whereby the seller must register and account for VAT on sales to the UK.
For any business to business (B2B) transaction whereby the goods are in the UK at the point of sale, the online marketplace liability is not applicable. Learn more »
Can I import my goods into the EU via the UK using a Bonded Warehouse?
Putting goods into customs warehouses can be done, it would be the same rule.
You can place your goods in a customs warehouse as a depositor without any authorisation. The forwarding agent will prepare the necessary documents in order to put the goods in the warehouse without paying the duty or VAT. If they are re-exported the VAT and duty is also not paid.
You can process your goods inside the warehouse, but only a certain type of processing is allowed, what is known as “usual forms of handling”. Handling, labelling, repackaging and bundling is allow inside the warehouse.
Does the Low Value Consignment Relief Programme still exist whereby I can bring goods under the value of £15 into the UK without worrying about VAT or duties?
The Low Value consignment relief programme no longer exists – HMRC have introduced the following measures on consignments with a value below £135:
The point at which VAT is collected from the point of importation to the point of sale. This means that UK supply VAT, rather than import VAT, will be due on these consignments.
Online marketplaces such as Amazon and eBay where they are involved in facilitating the sale, are responsible for collecting and accounting for the VAT.
For goods sent from overseas and sold directly to UK consumers (not on a marketplace), the overseas seller is required to register and account for the VAT to HMRC.
HMRC has abolished the Low Value Consignment Relief programme which stopped the need for an importer to pay import VAT on imported goods with a value of £15 or less.
HMRC have stated, however, where the business customer is VAT registered in the UK and provides its valid VAT registration number to the seller, the VAT should be accounted for by the customer by means of a reverse charge.
What’s the VAT treatment for consignments of £135 and above? What regulations apply?
For those consignments with values of over £135, there are some other changes that have come into effect from 1st January 2021. Businesses are able to use postponed VAT accounting to account for import VAT on their VAT return for goods imported from anywhere in the world.
This means the business is able to declare and recover import VAT on the same VAT return, rather than having to pay it upfront and recover it later, subject to normal VAT recovery rules.
What is the £135 consignment value based on?
The £135 threshold applies to the value of a consignment and not to any individual goods within that consignment. The consignment value is based on the sale price excluding VAT.
The sales price excludes:
1.Transport and insurance costs, unless they are included in the price and not separately indicated on the invoice.
2.Any other taxes and charges identifiable by the customs authorities from any relevant documents
If the consignment value is over £135 then normal VAT and customs rules apply ie. import VAT will be charged when the goods enter the UK.
Do I need a UK registration now?
The following businesses have to register for UK VAT (if not already registered) and account for VAT to HMRC:
Marketplaces – Any online marketplace that supports third-party sellers through its platform, as they now have to account for the VAT on all the sales from those third party sellers.
Selling on your own website – Any seller using their own website to sell directly to UK consumers, where the goods are outside UK at the point of sale or goods importing into the UK do not exceed £135 in value.
Holding stock – Any overseas-based sellers who hold stock in the UK for onward sale to UK private consumers.
I am currently filing for my digital service sales to private consumers on VAT-MOSS (Mini-One-Stop-Shop) in the UK, what do I need to do?
As a UK established business, you need to deregister from MOSS and choose an EU country from where you want to register on the non-Union scheme. The non-Union scheme works the same as the Union MOSS, but was designed for non-EU businesses.
Note: Northern Irish businesses are not able to use MOSS unless also established in an EU country. Will need to use the non-union MOSS.
Are Intrastat declarations still required?
Yes, all VAT registered businesses are required to submit monthly Intrastat arrivals declarations as before.
In 2020 we ran a series of Brexit Bootcamp webinars covering everything you need to know about how to keep your business compliant in 2021.
We compiled all of the information from our webinars into a handy downloadable eBook for you to refer to.
The webinar series and eBook can be viewed on our Brexit Bootcamp page.
In the run up to the end of the transition period in 2020 we ran a couple of webinars answering your Brexit related questions.
Latest Brexit Articles
Check out our most recent articles covering a variety of Brexit topics below
VAT in Northern Ireland Post-Brexit
The Brexit transition period ended at 11pm on 31 December 2020. Consequently, VAT accounting will change for goods moving between the European Union and the United Kingdom. Find out what this could mean for your business.Learn more »
Reporting Your Digital Supplies Through VAT MOSS
The VAT MOSS is a scheme available across the EU for traders to report their cross-border B2C supplies of digital services. From 1st January 2021, the UK will have left the EU Single Market and Customs Union, and therefore, lost access to the EU VAT MOSS scheme. Find out how to report VAT on your digital services through VAT MOSS.Learn more »
Will Amazon and eBay collect UK VAT on your behalf post-Brexit?
As an Amazon seller, you may have received a communication from the marketplace explaining changes to the VAT treatment of your supplies in the UK from 1 January 2021. We’ve explained what exactly these announcements mean to you as a seller.Learn more »
|✅ Get an EORI number||If you are yet to apply for an EU EORI number, head over to our EORI Registration Portal to get started.|
|✅ Make sure you have the required authorisations/ certificates||You will be expected to ensure products moved to the EU Single market are correctly labelled and marked in line with EU regulations.|
|✅ Review the VAT implications at each stage of your supply chain||Key things to identify: |
Will you need to register for VAT to report your distance sales?
Will you need to appoint a fiscal representative?
|✅ Classify your products using HS codes||Product classification codes will determine the taxes and tariffs applicable to your goods at the point of moving goods across the border.|
Useful tools and services:
UK Global Tariff tool
EU Combined Nomenclature
|✅ Estimate the value of your goods||You will be expected to estimate the value of the goods you import, and customs authorities can be really strict if you fail to declare the correct value.|
|✅ Engage with an Import Agent or Customs broker||A customs broker will ease the import process including documentation. Try using an automated customs clearance tool.|
EU Customs intermediary
Please note that as a non-EU seller, you might need to appoint an indirect representative for customs purposes to import into the EU.
|✅ Apply for a duty deferment account||If you import goods regularly, you may want to apply for a Duty Deferment Account, which can be beneficial for your cash flow. This account will enable you to pay customs duty, excise duty, and import VAT once a month through Direct Debit instead of being paid on individual consignments at the point of import.|
|✅ Keep relevant commercial records when moving goods||This will be key when trying to reclaim any import VAT on your local VAT returns. A new Import and Purchase template will be provided to you to record any imports you wish to reclaim.|
|✅ Don’t forget about Intrastat declarations!||The UK government confirmed they will still be a requirement post-Brexit. |
The Intrastat requirements will continue to apply to all UK VAT registered businesses, even if you are established overseas.
Need to know more?
For businesses looking to discuss their specific situation or learn more on this topic, we offer a Consultancy service that will ensure you get the tailor-made VAT advice you need. Contact us today to learn more.
This information was accurate at the time of publishing: 12/08/2020