Starting January 1, 2021, businesses selling goods or publications into the UK will be required to register through HM Revenue and Customs (HMRC), collect VAT (value-added tax) from customers, and remit VAT to HMRC quarterly.
If you sell to the UK, we highly suggest reading some of these resources to prepare for these changes. This will help you gain a better understanding of how this change may impact your business and what steps you need to take prior to January.
- Changes to VAT treatment of overseas goods sold to customers from 1 January 2021
- Information for international businesses bringing goods into the UK
- Import, export and customs for businesses: detailed information
- Check how to pay duties and VAT on imports
- Tax and customs for goods sent from abroad
- Get an EORI number
1. Learn who should register for VAT
The January 1 changes impact not only sellers residing in the UK but also EU and non-EU sellers who import goods into the UK. You can find the full guidelines for who should register for VAT on the HMRC website.
If you sell to UK customers from an online marketplace, they may collect and remit VAT on your behalf for orders up to £135. Each platform is different, so make sure you check with them directly regarding the requirements for your online business.
If you do not belong to an online marketplace and instead sell to UK customers directly, you will likely need to register your business to collect and remit VAT to HMRC. We recommend that you consult a tax professional to ensure that your business is ready for the upcoming changes.
Non-business shippers who send shipments to friends and family in the UK are not generally included in these changes but should consult HMRC’s manual for guidelines.
2. Register your business
To register your business for VAT, you can do this directly through HMRC. Registrations can take up to 20 business days and delays are expected due to COVID-19. We recommend that you complete this as soon as possible.
Again, we encourage you to speak with a trusted tax professional to ensure your business is registered correctly.
3. Communicate changes to your customers
Lastly, with the new changes to how and when VAT is collected, some online marketplaces will change how they display these fees to buyers. Some listings may now include an estimate for VAT in the item price. Or your buyers may see the total VAT amount at checkout. You may want to prepare your customers for these changes.
At this time, there will be no changes to creating shipments on our platform. We are working with our partner carriers to better understand the impacts on our clients and how we can help. Should you have any questions about this new requirement, we recommend that you reach out to HMRC directly.
As a reminder, international shipments must comply with the destination country’s customs requirements. It is the shipper’s responsibility to understand and adhere to any requirements. Some of the most common reasons for delays in customs clearance include:
- Inaccurate or misleading declared value
- One of the most common duty and tax disputes is declaring value incorrectly: always represent the actual transaction value as this can lead to delays and even possible fines.
- Vague or misleading descriptions of products
- Shipping non-compliant or restricted items: each country has unique requirements for what you can ship
- Missing or incomplete address or contact information
Find more of our international shipping tips on our blog.