U.K. VAT requirement for foreign sellers

Hello I am currently a seller on an online platform eg eBay.co.uk. I am based outside the EU in Switzerland. All products are shipped from Switzerland to the U.K. so there is no stock held in U.K. value of products range from 50£ to 2000£ If i sell products to U.K. buyers am I required to register for U.K. VAT in this case ? Thanks Blyton

Hi Blyton Pereira,

If you sell goods from overseas in to the UK and the goods are below the value of £135 then there will be a requirement to register for VAT. Please see the guidance :
VAT and overseas goods sold directly to customers in the UK
If the goods are above £135 then it depends who the importer is.
If the customer is the importer then they will account for any VAT but if you are the importer of the goods in to the UK then you will be making a supply within the UK and so VAT would need to be charged.

Thank you.

You mention selling through an on line platform so you should also look at; https://www.gov.uk/guidance/vat-and-overseas-goods-sold-to-customers-in-the-uk-using-online-marketplaces

Thanks both. Excuse me but I am still a but confused as fairly new to these VAT policies. Let us take 2 examples with the difference being the minimum value of an item being sold. Example: I as a seller am based in Switzerland. All my products are in Switzerland. I sell on ebay.co.uk products ranging from GBP 30 - 2200 per item. Total yearly sales exceeds 85k GBP. When it arrives in UK normally customers have to pay customs/duties depending on the value. Example: I as a seller am based in Switzerland. All my products are in Switzerland. I sell on ebay.co.uk products ranging from GBP 150- 2200 per item. Total yearly sales exceeds 85k GBP. When it arrives in UK normally customers have to pay customs/duties depending on the value. In each of the examples above do I need to register for VAT? My understanding in both cases since the customer is buying from me using ebay.co.uk, the customer is the importer. Let me know if my understanding is correct? Thanks

I don't get the significance of the values you have mentioned in your two examples. I am also assuming your sales are to UK consumers and not businesses - Import duty is waived on goods valued below £135 - The old VAT waiver for goods below £15 no longer applies - VAT is applied to goods of any value. - Where the goods are located outside the UK and below £135 UK VAT should be charged to the customer at point of sale. - If the sale is made through a online market place eg Ebay then they should charge and account for the VAT. They should be VAT registered in the UK to do this. No import VAT or customs duty is charged. I suggest you confirm with Ebay that this is how the VAT is being accounted for on your sales. - If you sell goods located outside the UK direct to consumers then you would need to register for VAT in the UK and charge the customer UK VAT at the point of sale and account for the VAT through your VAT return. No import VAT or customs duty is charged. - Where the goods are valued above £135 then normal import rules apply I.e. import duty and import VAT is due at the time of import. If the customer is the importer the customer will pay this prior to delivery. no further VAT accounting is required. -If you are an overseas seller who owns goods of any value that are located in the UK at the point of sale you must register and account for VAT on any sales you make directly to customers in Great Britain or Northern Ireland. - Its worth noting that the £85,000 turnover threshold to register for VAT does not apply to overseas sellers.

Thanks a lot for confirming. Its much clearer now. So to finalize my understanding, can you please confirm if the below statements are true ? We sell products ranging from 10 GBP to 2200 GBP. This means it crosses the 135 GBP amount and hence I should be registered for VAT, even though all my products are based overseas and I am not physically present in the UK and do not have any registered address/office in the UK. In terms of who pays the VAT: 1) for all products I sell that are below 135 GBP, UK VAT should be charged to the customer at point of sale. - If the sale is made through a online market place eg Ebay then they should charge and account for the VAT 2) for all products I sell that are above 135 GBP, UK customers will need to pay when it arrives in the UK at the time of import Thanks

I don't work for HMRC and I cannot provide specific advice on whether you must register for VAT in the UK . Your understanding is not quite correct, so as this is complex and potentially costly if you get it wrong you should probably seek some professional advice. The fact you sell goods priced between £10 and £2200 does not determine whether you need to register for VAT or not. What I have described in my earlier post are the different VAT treatments for individual orders/ consignments above and below £135. I have also only mentioned requirements for sales to individuals not business customers. If you sell through an on line market place it is the market place who must be registered for VAT and account for shipments below £135 as supply VAT. I.e. the VAT will be included in the price paid by the customer. As the VAT has been/ will be accounted for as supply VAT no import VAT is due at import . As I said you should check this with your market place to confirm this is what they are doing for your transactions. You must however register for VAT if: You ( as a non UK seller) hold any stock for sale, irrelevant of value, in the UK You ( as a non UK seller) are selling goods in individual consignments below £135 directly ( not through a marketplace) to consumers in the UK.

Hi
 

Blyton Pereira,

Since Brexit the rules regarding the sales of goods under the value of £135 from overseas has changed.If you are selling goods directly to the consumer then you would have to register for VAT.If you use a marketplace then the marketplace will need to account for the VAT instead of the overseas supplier and so VAT registration will not be necessary..As the guidance states: {Goods located outside the UK at the point of sale These new arrangements will apply to sales of goods to GB customers where the consignment does not exceed £135 in value. This aligns with the threshold for relief from customs duty, thus minimising the impact on customs procedures. Consignments above that value will remain subject to existing customs rules and processes and from 1 January 2021 UK VAT registered businesses will be able to use postponed VAT accounting to account for import VAT on their VAT return. For most consignments not exceeding £135 in value, instead of VAT being collected at importation or delivery to the customer, VAT will be accounted for at the point of sale. For VAT purposes the supply will be treated as follows: •if an OMP is not involved in facilitating the sale, there will be a supply direct from the seller to the consumer, which will be deemed to take place in the UK and so liable to UK VAT •if an OMP is involved in facilitating the sale, they will be deemed, for VAT purposes, to be making the supply to the UK consumer, which will be deemed to take place in the UK with UK VAT chargeable accordingly In both instances the value of the goods for VAT purposes will be based on the price at which they are sold to the consumer rather than any valuation calculated at the point of importation. For goods that are located overseas at the point of sale, the new arrangements will apply irrespective of where the OMP or the business selling the goods is established. This means that the following types of businesses will have to register for UK VAT (if not already registered) and account for VAT to HMRC: •any business that operates an OMP that facilitates sales of goods to UK customers •any business that sells goods directly (without OMP involvement) to UK customers where the goods are (a) outside UK at the point of sale (b) imported to the UK in consignments not exceeding £135 in value} If the goods are over £135 then whether the seller would need to register depends on who the importer of the goods are .If the customer is the importer then the overseas supplier will not need to register but if the overseas seller is the importer then VAT register would be necessary. Thank you.

Hi
 

Blyton Pereira,

Yes this is correct . Even though your business isn't in the UK and the products are based overseas there would still be a requirement to register for Vat for goods being sent to the UK below a value of £135. Thank you.