topic Re: New Customs Regulations for the UK in Selling

New Customs Regulations for the UK

worldwidewicket — Fri, 01 Jan 2021 01:05:34 GMT

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?

Re: New Customs Regulations for the UK

lyndal1838 — Fri, 01 Jan 2021 02:41:34 GMT

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.

Re: New Customs Regulations for the UK

twyngwyn — Fri, 01 Jan 2021 04:28:48 GMT

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

Re: New Customs Regulations for the UK

worldwidewicket — Fri, 01 Jan 2021 04:43:21 GMT

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

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.

Re: New Customs Regulations for the UK

jellybirddesigns — Fri, 01 Jan 2021 04:57:41 GMT

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.

Re: New Customs Regulations for the UK

jellybirddesigns — Fri, 01 Jan 2021 05:12:06 GMT

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.

Re: New Customs Regulations for the UK

jellybirddesigns — Fri, 01 Jan 2021 05:14:19 GMT

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.

Re: New Customs Regulations for the UK

digital*ghost — Fri, 01 Jan 2021 05:28:53 GMT

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-143-a-guide-for-international-post-users

Re: New Customs Regulations for the UK

worldwidewicket — Fri, 01 Jan 2021 05:39:57 GMT

@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-143-a-guide-for-international-post-users

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.

Re: New Customs Regulations for the UK

digital*ghost — Fri, 01 Jan 2021 05:59:23 GMT

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).

Re: New Customs Regulations for the UK

worldwidewicket — Fri, 01 Jan 2021 21:02:13 GMT

Thanks to everyone for their comments. Just a heads up for sellers. I just made another sale to the UK and eBay has added the VAT to the total including postage. The customer is upset and can't understand how postage could also attract VAT so I will just let him cancel the sale.

I think there are going to be a lot of customers who dont understand the new regulations and I think the only option is not to sell to Europe and the UK. Its just not worth the hassle.

Re: New Customs Regulations for the UK

digital*ghost — Sat, 02 Jan 2021 03:09:00 GMT

Again, same as our system.

For us, if the goods are valued under $1k, then eBay adds GST to the entire price, including any shipping. That means for us, if the item is $999 and shipping is $100, eBay adds and collects the GST. If it's $1001 and $5 postage, eBay won't add the GST, but customs will, assuming the value has been declared correctly.

Ditto for the UK, just the thresholds are different - if the goods are under that £135 threshold, then it's a taxable supply, and tax is applied to the entire amount. It doesn't matter if shipping is charged separately, it's a single contract for the supply of goods, and they are supplied as a single taxable good.

Delivery charges are a bit funny in the UK, though, so that might cause some confusion for a while - Royal Mail don't include VAT in their pricing of services, so maybe there is an expectation shipping is a VAT-free service. For delivery of purchases over there, VAT is also only applied to the delivery charges of a purchase if the goods are a taxable supply (that would be like GST only apply to postage if the product being sent also included GST, but everything would be GST free if the product was).

Re: New Customs Regulations for the UK

worldwidewicket — Sat, 02 Jan 2021 04:18:06 GMT

@digital*ghost wrote:

Delivery charges are a bit funny in the UK, though, so that might cause some confusion for a while - Royal Mail don't include VAT in their pricing of services, so maybe there is an expectation shipping is a VAT-free service.

Yes, customers wont understand the new system and will be annoyed that the VAT applies to shipping. Just reinforces the fact that it is not worth shipping to the UK.