VAT and overseas goods sold to customers in the UK
Following the end of the Brexit transition period, new rules on tax and duty now apply on goods sent to the UK from overseas. These changes are meant to ensure that goods from EU and non-EU countries are treated in the same way and that UK businesses are not disadvantaged by competition from VAT free imports.
For goods sold directly to customers in the UK from overseas with a value of £135 or less (which aligns with the threshold for customs duty liability) the point at which VAT is collected has moved from the point of importation to the point of sale.
Online marketplaces that are involved in facilitating the sale, are responsible for collecting and accounting for the VAT. Business to business sales not exceeding £135 in value will also be subject to the new rules but VAT can be accounted for by way of the reverse charge.
In addition, the low value consignment relief (LVCR), which was an import VAT exemption for goods valued at £15 or less, has been removed in:
- Great Britain for goods imported from outside the UK
- Northern Ireland for goods ordered remotely that are imported from outside the UK and EU
Normal VAT and customs rules on consignments valued at more than £135 will apply on the importation of goods into Great Britain from outside the UK or into Northern Ireland from outside the UK and EU.
There are different rules on the sale of goods into Northern Ireland from the EU and on the movement of goods between Northern Ireland and the EU.