Dear Customer:
HMRC announced that a new model for the VAT treatment of goods arriving into Great Britain from outside of the UK will take effect from 1 January 2021.
Outline of the changes:
1. For importing goods from outside the UK in consignments not exceeding £135 in value, HRMC will collect VAT when the goods are imported instead of sale.
The new arrangements will also revocate Low Value Consignment Relief, which relieves import VAT on consignments of goods valued at £15 or less. The VAT rate is 20%.
2. For goods sent from overseas, if the buyer is a business party, overseas sellers need to provide a GB EORI number and VAT number.
EU EORI numbers will not be recognized in the GB.
Online marketplaces (OMPs), where they are involved in facilitating the sale, will be responsible for collecting and accounting for the VAT. Overseas sellers will remain responsible for accounting for the VAT on goods that are already in the UK and sold directly to UK consumers without OMP involvement. For goods sent from overseas and sold directly to UK consumers without OMP involvement, the overseas seller will be required to register and account for the EORI & VAT to HMRC. However, the customer by means of a reverse charge will account for where the business customer is VAT registered in the UK and provides its valid VAT registration number to the seller, the VAT.
3. The changes will not apply to consignments of goods containing excise goods (Tobaccos & Alcohols) or to noncommercial transactions between private individuals. Existing rules will continue to apply for these transactions.
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To ensure your goods be cleared at GB customs, we advise all customers to register for a GB EORI (It only takes 10 minutes to apply) and a VAT as soon as possible.
EORI: https://www.gov.uk/eori
VAT: https://www.gov.uk/vat-registration/how-toregister
If you currently ship to the EU, there are no changes to the EU VAT and duty thresholds.
For any inquiries about the HMRC VAT treatment update, please dial our local customer service hotline.
SF International
2020.12.21