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New VAT Setting for the UK Regarding Brexit from 2021.

1285 4 mins article
Date Created: 2020-12-29 11:01:37 Last Edited: 2021-08-26 02:50:17

As a result of the Brexit Transition Period ends on December 31, 2020, the new UK VAT rules will come into force from January 1th, 2021
In this article, you will know about:
1. Details of new VAT import regulations for the UK and the EU from 2021.

2. What kinds of sellers are involved in the new UK VAT rules?

3. How to add UK VAT setting in the Shopify and eBay stores?

 

1. Details of new VAT import regulations for the UK and EU from 2021.

  • New VAT rules in the UK.

Under the new UK VAT rules from January 1th, 2021, VAT needs to be collected and remitted on orders up to a value of £135 imported into the UK and sold to consumers. There will no longer be a VAT exemption for small consignments up to £15. The VAT needs to be paid by the seller directly to the HMRC.
If you haven't registered for the VAT, you can apply for one online.
The standard rate of VAT is 20%. Please speak with a tax professional if you have any questions about your tax obligations.

  • New VAT rules for cross-border e-commerce in the EU.

To provide convenience to cross-border online sales and the importation of low-value consignments, the new VAT e-commerce rules will come into force on 1st July 2021 in the EU.

Along with the cancellation of the exemption at the importation of small consignments of a value up to EUR 22, all goods imported in the EU will be subject to VAT.

To simplify the declaration and payment of VAT, the Import One Stop Shop (IOSS) has been published. Check detailed explanations about IOSS here.

 

2. What kinds of sellers are involved in the new UK VAT rules?

  • The UK seller whose business is located in the United Kingdom and sells to customers in EU member countries.
  • The EU seller whose business is located in a European Union member country other than the United Kingdom and sells to customers in the UK.
  • The non-UK seller who sells to customers in the UK.
 

3. How to add UK VAT setting in the Shopify and eBay stores?
For online marketplace sellers, the VAT can be collected by the platform.

a. Setting VAT on Shopify.

Go to Shopify Settings > Taxes. In the VAT collection section, click Collect VAT.



In the VAT number, enter your VAT number. If you have applied for a VAT number but don't yet have one, then leave this field blank. You can update it when you receive your number.



b. Setting VAT on eBay.

My eBay > Account > Selling Preferences.


 

Manage VAT numbers > Edit.


 

Add the information.

 

With any uncertainties, please contact our online agent anytime.