From 1 January 2021, the VAT treatment of B2B imports of goods in consignments not exceeding £135 in value will change.
For imports of goods into GB from outside the UK, these changes will result in supply VAT being due instead of import VAT. The VAT accounting treatment for business to business sales of goods imported in consignments not exceeding £135 in value will be subject to supply VAT. Where the business customer is VAT registered in the UK and provides its valid VAT registration number to the seller or the online marketplace, the VAT will be accounted for by the business customer on its VAT return by means of a reverse charge. The business will be able to recover that VAT as input tax, subject to the normal VAT recovery rules on the same VAT return. The changes will not apply to consignments of goods containing excise goods or to non- commercial transactions between private individuals. Existing rules will continue to apply for these transactions.
However, for imports of goods into Northern Ireland from outside the UK or EU in consignments not exceeding £135 in value, VAT registered businesses must use Postponed VAT Accounting (PVA). Where a business customer provides its valid VAT number to the supplier or the online marketplace, the business will have to ensure that they select the option to use PVA when submitting their customs declaration. The UK recipient business will account for the import VAT on their VAT return and will be able to recover that VAT as input tax, subject to the normal VAT recovery rules on the same VAT return.
For imports of goods in consignments exceeding £135 in value a businesses registered for VAT in the UK will be able to account for import VAT using PVA on its VAT return for goods they import into:
- Great Britain from anywhere outside the UK
- Northern Ireland from outside the UK and EU
There will be no changes to the treatment of VAT for the movement of goods between Northern Ireland and the EU.
Businesses do not need any approval to account for import VAT using PVA on their VAT return. Businesses can select that they will be accounting for import VAT on their VAT return and will need to provide their EORI number and VAT registration number when completing their customs declaration.