New Customs Regulations for the UK

[worldwidewicket]

eBay wrote to sellers some time ago saying ....

• From 1 January 2021, eBay will collect and remit VAT on consignments up to a value of £135 imported into the UK and sold to consumers.

I just sold an item 5 minutes ago to a customer in the UK for approx 50.00 and ebay has not collected the VAT.

Does anyone know how this new system is going to work? eBay's letter was a bit vague ie If a seller sends something to the UK how will customs know if the VAT has been collected or not?

[lyndal1838]

Would the seller even know what is on the buyer's invoice?   It is the buyer who is going to pay the VAT just as the buyer pays GST when items come into Australia from overseas.

[twyngwyn]

https://www.ecommercebytes.com/2020/12/29/selling-to-uk-gets-complicated-with-vat-tax-changes/

[worldwidewicket]

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@twyngwyn wrote:
https://www.ecommercebytes.com/2020/12/29/selling-to-uk-gets-complicated-with-vat-tax-changes/

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Thanks for the link. I sell through eBay and my website. All packages have the same customs labels but no reference to whether the item was purchased through eBay or not. I am thinking that it might be easiest to stop selling to the UK altogether.

[jellybirddesigns]

The collection only starts from the 21st of January - at least according to another platform I sell on.

Your buyer will still have to pay duties separately at the moment.

I'm not sure how you will collect VAT from your own website though.

[jellybirddesigns]

My mistake, for some reason I thought the other platform would start on the 21st, but it does seem like the 1st is correct.

Not sure how this will all be implemented if the OP is already making sales on the 1st and Ebay is not collecting anything.

[jellybirddesigns]

I'm also just thinking that we might have to put the invoice on the outside of the package.

I do this already for parcels to Germany - just fold it up into a small ziplock which get taped down. Customs can easily open the ziplock to review the invoice.

[digital*ghost]

It's going to work exactly the same way our system does in regards to customs processing when it arrives in the UK.

Under £135 and not a gift - no import duty or VAT collected as they'll assume it already has been.

Over £135 and both duty & VAT will apply. 

So, while some shipping labels will have sections to declare whether tax has already been collected, it's not essential for customs clearance.

Personally, I have disabled shipping options to both the UK and EU on my website (EU because they are introducing the same or a very similar system in July, and the sales I get to both UK and EU countries aren't worth trying to figure it all out). My website (through Shopify) doesn't have a system that can accommodate multiple tax calculations at different rates and whether or not the order value is over or under a certain amount. Plus, I'm already registered for GST, I don't need multiple tax collection and payment burdens at the moment. 

Source for the info re: how packages will be handled from now on:

https://www.gov.uk/government/publications/notice-143-a-guide-for-international-post-users/notice-14...

[worldwidewicket]

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@digital*ghost wrote:

It's going to work exactly the same way our system does in regards to customs processing when it arrives in the UK.

Under £135 and not a gift - no import duty or VAT collected as they'll assume it already has been.

Over £135 and both duty & VAT will apply. 

So, while some shipping labels will have sections to declare whether tax has already been collected, it's not essential for customs clearance.

Personally, I have disabled shipping options to both the UK and EU on my website (EU because they are introducing the same or a very similar system in July, and the sales I get to both UK and EU countries aren't worth trying to figure it all out). My website (through Shopify) doesn't have a system that can accommodate multiple tax calculations at different rates and whether or not the order value is over or under a certain amount. Plus, I'm already registered for GST, I don't need multiple tax collection and payment burdens at the moment. 

Source for the info re: how packages will be handled from now on:

https://www.gov.uk/government/publications/notice-143-a-guide-for-international-post-users/notice-14...

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I get what you are saying about them assuming that the VAT has been collected. eBay will certainly have collected the VAT and will submit it to the UK. but I am wondering about selling through a website, etc. Surely they cant just assume that the VAT has been collected. They would have to be able to see an invoice I would have thought.

I'm also registered for GST and don't want the hassle of collecting tax for other countries but it is a real pity that I will lose a lot of business by not selling to the UK and Europe.

[digital*ghost]

Jellybird's reply just above mine about including an invoice I think is the best advice - I'm pretty sure that while I was researching this when it was first announced, I read that one will need to be included in the package anyway (I normally don't include them in OS packages, unless required by customs, and just use the customs declaration for value). On the outside of the package is a better idea, as then the parcel itself won't need to be opened to check, which always has the potential to affect the contents. 

The invoice would then contain all of your business info, as well as the value of the goods, and they can cross-reference that to their own records.

I ship with DHL ecommerce and they have implemented a whole host of new fields on their labels recently, not sure who you use but this may be available with other shipping companies and possibly (eventually) Aus Post. (eg you can indicate if it was sold through an online marketplace, you can also include a URL for your website instead, as well as for the order so it can be looked up online, plus there's a checkbox to indicate if tax was already collected).