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UK abolishes <£15 VAT free imports. EU to follow.

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Fraser:
For those unaware, I was made aware today by Forum member Ultrapurple that eBay UK are adding VAT to sales from China. I did some digging and sure enough, as of 1st January 2021 the UK has abolished the £15 VAT free import threshold. A new £135 threshold has been introduced. ALL imports to the UK below £135 are liable to VAT collection at source (point of sale) and all imports above £135 require the usual importation value declaration and payment of VAT by the buyer before delivery.

Apparently the £15 VAT free threshold was originally intended to reduce the workload on HMRC and its collection agents. The Low value VAT relief system was seriously abused though. Items were undervalued to come in under £15 and avoid VAT. That loophole has now been closed and the responsibility for collecting the VAT falls to the seller or marketplace fir all items under £135.

On a positive note, maybe this will avoid the awful paperwork fees that many courier companies and postal services used to charge on lowish value item VAT collection. Example .... Say an item costs £20 and £4 VAT is due BUT there is a £12 paperwork fee from the courier to pay !

Times, they are a changing in the UK.......

Fraser

Fraser:
Articles on the changes....

https://tamebay.com/2021/01/have-vat-changes-for-online-marketplaces-levelled-the-playing-field.html

https://www.avalara.com/vatlive/en/vat-news/eu-2021-ending--22-import-exemption--import-oss-returns.html

The EU is going to follow this same strategy in mid 2021

mikeselectricstuff:
So how exactly are they going to police collection from foreign sellers ?

Fraser:
Mike,

Not sure how this is going to work in reality but there is no longer any VAT relief below £15. An independent (non-eMarketplace) seller could undervalue a sale but exactly how that would be policed I do not know. eBay have already applied the change so I have seen all my low value watched items increase in cost since 1st January. I have read that FedEx have previously been challenging suspicious package valuations by requiring buyers to provide proof of purchase documentation with full cost details.

It is early days but we can kiss goodbye to VAT free imports of CD’s, DVD’s and ink cartridges from the Channel Islands !

Fraser

DC1MC:
Speaking of which Fraser, will I ever get my fireman propeller camera from a long while ago when you're clering your inventory ?

DC1MC

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