UK VAT Changes for Online Sellers

With the end of the Brexit transition period on Dec. 31, 2020, the new UK VAT law has been implemented, which means VAT changes to the sale of goods for sellers in cross-border e-commerce. VAT changes affecting Northern Ireland have also taken place. 

The separation of the UK from the EU means goods imported or exported between the UK and the EU must be declared to Customs. Undoubtedly, the implementation of the new VAT law caused significant impacts for sellers in the European market. In this article, we will explain VAT changes to online sellers and give answers to FAQs on VAT. 

VAT Changes: Overview

Here's a brief summary of the official Policy Paper, Changes to VAT treatment announced by HMRC (HM Revenue& Customs): 

1. The point at which VAT is collected will be moved to the point of sale for imports of goods from outside the UK in consignments valued at less than £135;

2. Online marketplaces will be obligated to collect and account for the VAT to facilitate the sale;

3. The Low Value Consignment Relief, which relieves import VAT on consignments of goods not exceeding £15 in value, will cease to apply;

4. The VAT treatment for goods sold to consumers in Northern Ireland is the same as the rest of the UK.

About VAT Charged for Purchases on Amazon

You can find "About VAT on Sales by Amazon" under Help & Customer Service on the Amazon UK site. 

As you can find from the above, purchases on Amazon UK site for UK delivery, purchases across the UK - EU border, VAT-registered business, non-VAT-registered consumers and business, VAT treatment differs.

3 Key Things Amazon Sellers in the European Market Should Do 

1. Ensure that you've inventory in the UK and the EU;

2. Prepare a VAT number;

3. Get an EORI number.

About VAT Charged for Purchases on eBay

As for 2021 VAT changes UK, you can also find announcements on eBay. 

It's worth mentioning that all eBay sellers on the UK site and all EU sites will be required to provide a gross price and a separate VAT rate on their listings for eBay to collect the right VAT amount from consumers from March 1, 2021. 

What Should eBay Sellers in the European Market Do?

It's highly recommended that eBay sellers check and finish specifying applicable VAT rates on existing product listings on the eBay UK site or other European eBay sites immediately. If you don't have any EU or UK VAT ID, when you edit or create listings, just enter 0% beside the price. 

 
To get a VAT number, you can follow the steps in the video below: 

SaleYee's Measures to Adapt to UK VAT Changes

To comply with the new vat rules, SaleYee.com will roll out updates of relevant functional modules soon and ask online sellers to submit relevant information for UK delivery. SaleYee Dropshipping Platform will take measures as follows in response to VAT changes UK:

1. The prices of goods located in SaleYee's UK warehouse will be adjusted

For all goods in SaleYee's UK warehouse, SaleYee will ask suppliers to specify the applicable VAT rates on existing listings and adjust the prices accordingly. In this way, online retailers can see the VAT amount at checkout. The price update will be notified later.

2. SaleYee will launch updates to record online sellers' VAT numbers 

Online retailers will be asked whether they are VAT-registered for the right VAT treatment on SaleYee.com. SaleYee.com will launch updates to record and verify online retailers' VAT numbers soon. Stay tuned! 

Please note that different documents are required for those who are VAT-registered or non-VAT-registered. VAT invoices for purchases on SaleYee.com will differ accordingly.

3. Issue VAT invoices for purchases on SaleYee.com between Jan. 1 and 20, 2021

For products in SaleYee's UK warehouse, the prices on SaleYee.com were shown exclusive of VAT. This notice can be found on product pages on SaleYee.com. If you failed to pay attention to the notice and sold products on third-party platforms at lower prices than you sourced from SaleYee.com between Jan. 1 and 20, 2021, please contact your account manager to submit evidence and apply for VAT invoices from the date of this notice to Jan. 31, 2021 (PST). Please note that SaleYee will no longer handle such disputes beyond the aforementioned period.

FAQs on SaleYee's VAT Compliance 

1. When will SaleYee officially comply with VAT changes?

Since the implementation of the new UK VAT law on Jan. 1, 2021, SaleYee.com is legally required to collect and account for VAT. For goods in SaleYee's UK warehouse, on product pages, SaleYee has notified online sellers of the VAT-exclusive prices and kindly reminded them to add the VAT amount for UK delivery.

Applicable VAT rates will apply to goods on SaleYee.com and the prices on SaleYee.com will be shown inclusive of VAT soon. You will be notified of the changes later. 

1. For what purchases will VAT be charged on SaleYee.com?

From January 1, 2021, the SaleYee Dropshipping Platform is legally required to collect VAT on orders:

① Shipped from SaleYee's UK warehouse

② Delivered to UK addresses.

2. How will the prices be adjusted on SaleYee.com? 

Prices of products shipped from SaleYee's UK warehouse will be shown VAT-inclusive on SaleYee.com. The VAT amount will be specified at the checkout, along with the gross price. SaleYee Dropshipping Platform will launch updates as soon as possible for the adjustment.

4. Who is supposed to pay VAT?

For each order, the VAT amount will be automatically calculated according to the taxable gross price at checkout on SaleYee.com. Distributors will be required to pay the total amount due to complete the purchase. VAT-registered businesses can apply for a VAT invoice after checkout. (SaleYee Dropshipping Platform will launch e-invoicing soon. Please check the latest notification.)

5. Will online retailers selling goods to consumers in the UK be affected by SaleYee's VAT rules?

Without exception, all businesses in the UK must comply with the new VAT law, and adapt to the VAT changes. Additionally, VAT compliance will create a fair business environment and promote the sustainable development of cross-border e-commerce. 

6. How to apply for a VAT invoice on SaleYee.com?

SaleYee's electronic invoicing function will be coming soon. It is estimated to be launched in Q1. (This won't affect your VAT declaration, because you can declare it quarterly after the launch.)

7. What about the VAT rate for purchases on SaleYee.com?

The applicable VAT rates will be specified for different goods sold on SaleYee.com to consumers in the UK.

8. What sums will be included in the invoice?

The gross price of products and VAT rates will be included.

9. What information should a VAT-registered business submit?

A VAT-registered business should submit the following information to the SaleYee Dropshipping Platform:

• Company name;
• VAT identification number;
• A copy of VAT registration certificate;
• Country of incorporation;
• Business registration address;
• A copy of business license/registration certificate;
• Name of your online store;
• URL of your online store;
• A screenshot of your seller account.

10. What if you are not VAT registered, what should you submit to apply for a VAT invoice? 

• Company information;
• Country;
• Type of identity document;
• ID number;
• A copy of Photo ID.