This article is applicable to sales of items from the EU to the UK and explains how Vinterior will be collecting VAT on orders placed for items sold below £135 (€150). For more information on this topic, please refer to this link: Read full UK government guidelines here
Collecting UK seller VAT:
Collecting VAT on the sale:
To comply with new trade regulations Vinterior will be collecting on your behalf UK supply VAT on sales with a value of £135 or less. This will affect the sale of items from outside the UK (England, Scotland and Wales) to buyers based in the UK.
When those goods are sold through Vinterior, Vinterior becomes liable for the collection of the VAT, unless the sale is a business-to-business sale and the customer has provided their UK VAT registration number.
What items are affected:
The £135 limit applies to the value of a total consignment (excluding delivery), that is imported to the UK. The £135 limit applies to the value of a total consignment that is imported, not the separate value of individual items that are in a consignment.
Item sold under the Margin Scheme:
- For items below £135: you are accounting for the UK supplier VAT based on the value of the goods so you cannot apply the margin scheme. If you have any questions, please contact your local accountant.
- For items above £135: There is Import VAT (20% of the item price and delivery fee) valued on the price of the goods. The margin scheme is not applicable either.
How is the UK supply VAT calculated?
The UK Supply VAT is calculated on the price of a sale to a UK customer when the total amount (whether one item or more) is equal to or below £135.
You are an EU VAT registered seller, and you sold 2 items for a total of 120 for 2 separate orders.
⇒ The total is under £135, so UK Supply VAT would apply.
Before BREXIT: Vinterior would have sent you £120 minus commission and VAT on commission (where applicable). You would then have declared the amount of VAT in your home country, whether the general scheme or the margin scheme, based on your own taxation choice.
After BREXIT: Vinterior is liable to collect UK supply VAT on this sale. This means that the buyer would still pay £120. At payout, Vinterior would subtract the UK Supply VAT, which means here: £120/(1+UK Supply VAT rate) = £120 / (1+20%) = £100
This UK supply VAT will be visible on your sales receipt and on your Payments page. The buyer will not be aware of it.
Managing buyer's expectations:
This should not impact the buyers directly, so there is no reason to share information with them. Please feel free to reach out to your tax authorities or your accountant if it impacts your tax returns.