Vat: A Taxing Issue

18th August 2021

VAT has also become a nightmare post Brexit. It has impacted on UK traders selling to the EU, European sellers shipping to UK customers and, most importantly, to UK online shoppers.

Many shoppers have been left entirely confused about whether VAT was charged when they bought an item online from an EU seller, or whether they must pay it when the goods arrive.

For goods under £135, the EU seller should charge the VAT at the point of sale; for goods over £135, the UK buyer pays the VAT at the point of delivery. If that isn't confusing enough, EU sellers should have registered with UK Customs in order to pay back the VAT they charged on goods under £135. Many have not done so because of the vast amount of red tape involved. It's all a huge mess.

To add a further twist to the VAT shenanigans, if the item was purchased through an online marketplace such as eBay or Amazon, it’s the marketplace itself that is responsible for charging and reporting the UK VAT. Confused yet? Some shoppers have ended up paying 20% VAT twice.

It’s no wonder the European Consumer Organisation (BEUC) is demanding that the EU, its Member States, and the UK clarify immediately what the Brexit agreement means for consumers when it comes to paying customs duties. We entirely back the BEUC’s call for action.

Source - Parcel Hero - https://www.parcelhero.com/research/brexit-study