HMRC guidance on new EU VAT e-commerce portal

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EU VAT e-commerce portal

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HMRC guidance on new EU VAT e-commerce portal

HMRC has published guidance on how the introduction of the EU’s new VAT e-commerce package on 1 July 2021, will affect UK businesses. The e-commerce package introduces significant changes to the VAT rules for international trade related to e-commerce from the EU. The new rules were originally meant to come into place from 1 January 2021 but were delayed due to the coronavirus pandemic.

HMRC’s policy paper highlights the changes from a UK perspective and states that the changes will affect businesses:

  • selling or supplying goods from Northern Ireland to non-VAT registered customers in the European Union (EU)
  • making supplies of goods from the EU to non-VAT registered customers in Northern Ireland
  • sending low value goods to Northern Ireland (or the EU) from outside the EU and Northern Ireland (including from Great Britain (England, Scotland and Wales))
  • non-EU businesses with goods located in Northern Ireland at the point of sale.

It also affects online marketplaces that facilitate the sale of goods:

  • located in Northern Ireland (or the EU) by non-EU businesses to non-VAT registered customers in EU and Northern Ireland consumers
  • from Great Britain to consumers in Northern Ireland and the EU

Goods are low value where they are in consignments with an intrinsic value not exceeding £135 (€150).

The EU e-commerce package applies to both goods and certain electronically supplied services throughout the EU. However, as the Northern Ireland Protocol only applies to goods, the UK’s implementation of the EU’s e-commerce package will only apply to supplies of goods in respect of Northern Ireland. HMRC has said that further guidance will be made available before 1 July 2021 for Northern Ireland businesses making supplies to the EU.

Get in touch with us if you have any questions on the changes to the VAT rules for international trade. Speak to your our usual FC contact or email us at hello@farnellclarke.co.uk.

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