The VAT on imported goods with a value of up to £135 will be collected “at the point of sale” rather than the point of importation from 01 January 2021, it has been announced.
The regulator said the changes will ensure that goods from EU and non-EU countries will be “treated in the same way” and that UK businesses are not “disadvantaged by competition from VAT-free imports”.
HMRC added that the changes will also “improve the effectiveness of VAT collection on imported goods” and address the problem of overseas sellers “failing to pay the right amount of VAT on sales of goods that are already in the UK at the point of sale”.
In practice, it means that the online marketplaces involved in the facilitation of the sale of imported goods will be responsible for collecting and accounting for VAT.
For goods sold directly to UK consumers, the overseas seller will be required to register and account for the VAT to HMRC.
VAT-registered business customers, meanwhile, should provide their registration number to the seller and VAT will be accounted for by the customer by means of a reverse charge.
For further information about the changes, please click here.
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