VAT for Brexit – Warning to online sellers
Important warning for online sellers from all countries, including all European countries, Australia, Canada, China, India and US, selling goods to the UK!
If there is a no-deal Brexit, on 12 April 2019:
All B2C sales of goods of a value of GBP 135 or less sent as parcels are subject to UK VAT
All B2B sales of goods of a value of GBP 135 or less sent as parcels are subject to UK VAT
The import VAT can be paid by either:
- using the online service to report and pay the import VAT due to HMRC
- paying a parcel operator that offers a service to pay import VAT to HMRC
In order to comply all non-UK sellers of these goods have to:
instruct a parcel operator that offers a service to pay import VAT to HMRC, or
get an Import VAT Reference (IVR) number and:
> report and remit quarterly the VAT collected from UK customers
> issue correct VAT invoices to UK businesses so they can recover the VAT
> mention the IVR number on shipping documentation and import declaration
If you do not register with HMRC or pay import VAT to a parcel operator, you may find:
your parcels are delayed or stopped from entering the UK
the UK buyer may have to pay additional tax and fees
you have to pay a penalty of GBP 1,000
There is no threshold, so this applies from the first dollar!!
To whom does this apply:
| Transaction | IVR number required | UK VAT? |
| Netherlands based manufacturer of wooden shoes of EUR 25 selling to UK consumer via website. | Yes | Yes |
| Chinese seller on Amazon Germany selling iPad cover of EUR 10 to UK business | Yes | Yes |
| American seller selling train models of USD 125 via website to UK consumer | Yes | Yes |
| Chinese seller on AliExpress selling squishy toy of USD 1.75 to UK consumer | Yes | Yes |
| Swiss clock maker selling watch of CHF 2,500 via website to UK consumer | No | No |
| Chinese seller on AliExpress selling surveillance camera system of USD 750 to UK business | No | No |
| The same Chinese seller on AliExpress selling accessories for the surveillance camera system of USD 75 to UK business sold at the same time but in separate parcel | Yes | Yes |
How GVC can help?
Global VAT Compliance‘s specialized services make sure you are fully VAT compliant, so you can focus on your expanding business. Our team is ready to help your company to take all the necessary steps to be compliant after Brexit and ensure seamless supplies to your UK customer base!