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Brexit Transition: VAT update

HMRC has published two pieces of guidance on VAT relating to the sale of goods to customers inside Great Britain. The rules take effect from 11pm on 31 December 2020.

VAT and overseas goods sold directly to customers in Great Britain from 1 January 2021

VAT and overseas goods sold to customers in Great Britain using online marketplaces from 1 January 2021

Overseas goods sold directly to customers in Great Britain

For goods that are outside Great Britain at the time of sale and with a consignment value of £135 or less, UK supply VAT is due at the point of sale. There are different rules for consignments of goods containing excise goods and non-commercial goods. Normal VAT and customs rules apply to consignments with an intrinsic value above £135.

For business to business sales the seller will not need to charge and account for VAT so long as they have obtained the customer’s VAT registration number. Where goods are located in the UK at the point of sale, the seller must register for VAT and account for VAT on any sales to customers situated in Great Britain.

Sales through an online marketplace

Responsibility for import VAT and Customs Duty remains with the overseas seller where goods are imported into Great Britain. The sale to the online marketplace will be a zero-rated supply and the online marketplace will be liable to account for VAT on the sale to the customer unless a UK VAT registration number is provided.

Refer to the links above for further information.