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Since 1 July 2021, there have been a number of European Union (EU) VAT changes that businesses should take note of. This includes the e-Commerce package that was launched on the same date - mostly impacting businesses outside of the NI and EU that supply low-value goods to these countries, and goods from the EU to non-VAT registered consumers in NI (and vice versa).
In this blog post, we’ll run through the key highlights from this package and the introduction of two new One Stop Shops.
Here’s a summary of changes that you’ll want to take note of following EU VAT from 1 July 2021:
From the newest updates at a glance, we know that the distance-selling VAT thresholds in each EU member state has been removed and replaced with a single pan-European threshold of £8,818.
This would mean that there’ll be multiple EU member state VAT registration obligations. To make things simpler for us, the One Stop Shop (OSS) does the following:
With that in mind, UK businesses should also take note of the following before registering for the OSS Union Scheme from 1 July 2021:
The IOSS is intended to simplify the declaration and payment of VAT on distance sales - from non-EU countries to the EU - with an intrinsic value of £135 or less.
Tip: The intrinsic value is the price the goods were sold at, without extra charges like postage and packaging charges
As we observed from the newest updates, the Low-Value Consignment Relief (LVCR) is being removed from 1 July 2021. To help businesses who are affected by extra VAT charges from their imports because of this, the Import One Stop Shop (IOSS) does the following:
You might also want to take note of the following before registering for IOSS from 1 April 2021:
Folks who are using online platforms such as eBay and Amazon, fret not as you’re covered. When selling to EU customers, you don’t need to declare VAT on your sales from 1 July 2021.
Under the new rules, you’ll only be liable to account for VAT on the supplies where:
We hope this guide covers everything you’ll need to know about the newest EU VAT package. On that note, we can help your EU businesses to get registered for VAT in the UK. With our quality and professional services, Right Accounts will also save you the hassle of tax-return forms by completing them for you.
Contact us here.
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