From the 1st of July 2021 the EU will introduce a new VAT e-commerce package. These changes will affect B2C sales of goods between the Northern Ireland and the EU, and the import of ‘low value’ B2C goods into the EU or Northern Ireland from outside the EU.
Here are some clarifications who will be affected and what the businesses who trade with the EU should do.
Who is affected by the EU VAT e-commerce package that will be introduced on 1 July 2021?
- Businesses who supply goods from Northern Ireland to non-VAT registered consumers in the EU
- Businesses supplying goods from the EU to non-VAT registered consumers in Northern Ireland.
- Businesses who send ‘’low value goods’’ to Northern Ireland or the EU from outside the EU and Norther Ireland including from Great Britain, England, Scotland, and Wales.
- Online marketplaces who facilitate the above transactions may also be affected.
What are the changes that are being introduced in the new EU e-commerce package?
- A new threshold of £8,818 (€10.000) will be introduced for B2C sales of goods in the EU. This threshold will apply to such sales to and from Northern Ireland. From 1st of July 2021 suppliers sending goods from the EU to Northern Ireland should account for UK VAT in the UK if those sales exceed the above threshold.
- In certain cases, online marketplaces will be liable for collecting and accounting for VAT on goods supplied to Northern Ireland.
- In line with the UK rules introduced on the 1st of January, the EU has removed the low value consignment relief on imported goods with value of up to €22.
- Two new EU IT systems will be introduced to facilitate the collection of VAT across the EU and the help businesses deal with administrative burdens when filing VAT in the EU: one system will deal with VAT on low value consignment goods: and the other system will help to file VAT on B2C sales of goods within the EU.
- Online marketplaces will be liable for collecting and paying of VAT on non-excise goods in consignments sent from Great Britain to Northern Ireland not exceeding an intrinsic value of €150.
What are the One Stop Shop and Import One Stop Shop?
HMRC will support UK traders by introducing two new VAT e-commerce IT systems:
- One Stop Shop will be introduced to reduce administrative burden on such businesses.
The system will allow to register for VAT electronically for VAT payments and reporting across all EU member states.
- UK traders will be eligible to register for One Stop Shop, if they operate under the terms of the Northern Ireland Protocol, are VAT registered and sell goods with the total of more than £8,818 or €10,0000.
- One Stop Shop will be available on Gov.uk for businesses from 1st of July 2021.
The Import One Stop Shop (IOSS) is an optional VAT collection facility for imports of low value consignments.
The Import One Stop Shop is introduced as an additional facility for businesses across the world who are importing low consignment goods not exceeding £135 (€150), into the EU. Businesses who decide to register for such system.
The IOSS scheme is an optional accounting scheme that is available to businesses anywhere in the world importing low value non-excise goods, in consignments not exceeding £135 (€150), into the EU. If such consignment exceeds the value of £135, the current rules will apply.
This system will not be introduced in the UK from 1st of July 2021 until the system is fully implemented.
One Stop Shop will allow you:
- Trade across all 27 EU member states with one VAT registration number
- Improve your cashflow by removing import VAT payments.
- Enhance customer experience with reliable and transparent pricing at checkout.
How to Get Started with One Stop Shop