The big issue for small internet traders selling into the uk from the eu and vice versa is customs clearance around vat
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Is there a lower limit where they won't care? or is e.g. ordering a tube of toothpaste from the EU now going to become a major exercise...
My understanding was that VAT has always been due. Whilst in the EU it would have been like buying selling in the UK with VAT added. If you were non VAT registered you paid VAT to the seller even if in the EU, if you were VAT registered you would not pay the VAT but would presumably have it charged when it landed. The rest of the world didn't charge VAT and UK customs were supposed to collect it on arrival. I do remember something about the EU looking into the fact that the UK was not charging the VAT on all the items that were due it. I expect there was an exemption for small items but even on large items getting charged was hit and miss, but then the UK gov has always been shy about collecting taxes hence where we are now.
The VAT situation has long been biased incorrectly.
Here's an example of how it works at present (UK) and will carry on working till at least 1st July 2021 between EU members.
Company in Luxembourg (17% VAT) sells a product to Consumer in Denmark (25% VAT) - Danish consumer is charged
17% VAT.
Company in Denmark (25% VAT) sells a product to Consumer in Denmark (25% VAT) - Danish consumer is charged
25% VAT.
Company in Luxembourg (17% VAT) sells a product to Company in Denmark (25% VAT) - Danish company is charged 17% VAT, and can reclaim this as INPUT tax (typically, there are exceptions).
Company in Luxembourg (17% VAT) sells a product to Consumer in Denmark (25% VAT) and supplies VAT number to Luxembourg company - Danish company is charged 0% VAT.
There are exceptions to this if a company sells beyond a certain threshold, but in general this is how it operates for the smaller companies. This has always struck me as asymetric (neutral as whether it's good or bad). In the UK this is part of the reason why CD/DVD retailers used to operate warehouses in the Channel Islands (the other reason was a VAT threshold on imports).
From 1st July 2021 this will change in the EU.
https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_enThe benefit of having a warehouse in a low VAT regime will largely disappear and the overall EU VAT take will apparently increase by €7bn - which essentially comes out the pockets of EU citizens... A more level playing field, by increasing the height of the soil (feel free to insert another synonym for soil)?