New UK VAT rules apply after Brexit 1 January 2021 and place new demands on Non – UK E-commerce.
Going forward, HMRC wants digital platforms to charge and settle VAT on behalf of the many webshops that sell to UK consumers via digital platforms such as Amazon. The obligation applies regardless of whether the item is in the UK or in DK at the time of the sale.
If you sell goods from your webshop directly to UK consumers, you must collect and report 20% UK VAT yourself. This requires a UK VAT registration in the UK.
There are two options where VAT is charged at the time of sale:
- For goods sold to English customers where the goods are outside the UK at the time of sale and where the goods are subsequently imported into the UK.
- For goods already in the UK at the time of sale and where the sale is carried out by a foreign company or a digital platform (Amazon, etc.)
The new UK VAT rules redefine the VAT obligations for digital platforms in the UK. In the future they have another VAT status, which is why they will be responsible for reporting and paying VAT in the UK. However, this does not mean that foreign webshops are exempt from VAT obligations in the UK. It will be the responsibility of the foreign webshop to import their own goods to the UK. At the same time there will be an obligation to report British sales and settle import VAT and customs duties.
Pan European FBA – Amazon
Foreign webshops making use of Amazon’s Pan-European FBA will experience changes already. In the period from 21 to 28 December, Cross-Border Fulfillment via EFN and Pan-European FBA will be gradually shut down with a full stop from 28 December. In the future, Non-UK webshops will have to send goods to fulfillment centers in the UK and the EU in separate flows. It will not be possible to ship goods between the UK and the EU as informed by Amazon.
