Starting a new business? Get 40% off our accountancy services for 3 months! 😎


The end of the Brexit transition period saw the UK leave the EU VAT area, and meant new rules and processes when moving goods between the UK and EU. The EU is rolling out further rule changes from 1st July 2021 which will change VAT for ecommerce sellers and online marketplaces in any country who sell directly to EU consumers.

Who is affected by the new EU VAT rules for e-commerce?

If you sell or supply goods and services to EU consumers who aren’t VAT registered then yes, the changes might affect you. It’s important to note there are special arrangements for Northern Ireland.

These arrangements have an impact on what the rules mean for you depending on whether your business is in Northern Ireland, or in Great Britain (England, Wales, Scotland). We’ll go through the new e-commerce VAT rules in more detail, and how the changes might affect your business on the basis of location.


Comprehensive tax return services

From only £24.50 per month

Learn more

Like the name suggests, distance selling means that you are, literally, selling at a distance, rather than in-person in a shop. Under the previous rules, sellers could make distance sales to consumers in other EU countries without needing to register for VAT there, until they reached the distance selling threshold for that country. Once they reached the distance selling threshold for that country, they would need to register for VAT there.

When the new rules kick in on 1st July 2021 the distance selling thresholds for each EU state will be replaced with one universal threshold.

The new universal distance-selling threshold is



The new rules take all EU distance sales into account, rather than operating a country-by-country basis.

  • Before 1st July 2021: You might reach the distance sales threshold in one country, but not in another. You can register for VAT in one country, but continue selling into others under distance selling rules.
  • From 1st July 2021 onwards: You’ll take the total of your cross-border distance sales into consideration. Once the total of your distance sales hits the threshold, you’ll need to start registering for VAT in other EU countries.

Remember, though, that British businesses (in Wales, Scotland, and England) are no longer covered by distance selling rules, but those in Northern Ireland are.

The changes to the distance selling rules tie into the new One-Stop Shop (OSS) for VAT. The OSS is an optional system which aims to make it easier for businesses to report the VAT collected on distance sales.

If you’re in the EU or in Northern Ireland, you can register for the OSS alongside your normal VAT return. You’ll be able to continue using the OSS to report your distance sales until you hit that €10,000 threshold, at which point you must register for VAT in the country that you’re selling to.

It’s important to note that this only applies to EU and NI businesses though! If you’re in Great Britain (that’s England, Wales, or Scotland) then reporting distance sales through the OSS or through your UK VAT return is no longer an option. Instead, your sales will be classed as exports or fall into the cross-border services and digital sales category.

Check out our article about EU VAT rules for British businesses after Brexit for more information.

The Low-Value Consignment Relief allowed sellers to import goods for EU consumers without paying import VAT, as long as they were valued at €22 or less. The UK stopped using the LCVR for imports when the Brexit transition period ended on 31st December 2020.

LVCR will stop for all countries from 1st July 2021.

So, VAT now needs paying on everything, but there are changes for whose responsibility it is to collect the VAT. The process for doing so depends on the value of the shipment, and whether the buyer is a consumer or a business. Sellers and online marketplaces can collect import VAT on consignments worth less than €150.

‘Collecting the import VAT’ means you’ll charge VAT on the sale using the rate of import VAT in the customers’ country. But what do you do once you collect it? And who actually collects it?

Sellers and online marketplaces in the EU and NI can sell to an EU consumer, and collect the VAT on shipments worth less than €150.

Rather than registering for VAT in the buyer’s country, and then reporting the VAT there, the seller can register for the new Import One-Stop Shop (IOSS) in their own country, alongside their existing VAT registration. They can then submit an IOSS return to report the import VAT that they collect, and do this alongside their regular VAT return.


Ecommerce accountancy services

Accounting for eCommerce sellers from £24.50 per month

Learn more

Can I register for IOSS in Great Britain (England, Wales, Scotland)?

British sellers are the same as other non-EU sellers now. You’ll be able to register for IOSS, but you won’t be able to register for it in the UK – that’s only available to businesses in Northern Ireland.

A British business can only register for IOSS in an EU country, and to do that you must register for VAT there. And that means appointing a VAT fiscal representative, and so on. That is, if it’s actually your responsibility to collect it, which we’ll cover next.

The EU is introducing rules which change the way import VAT on purchases made through an online marketplace is dealt with.

From 1st July 2021, an EU or NI customer buying through an online marketplace pays the import VAT at the point of sale. The marketplace will collect the VAT, making them responsible for the appropriate VAT registration, not the seller. The UK already has these rules in place for British customers, following the end of the Brexit transition period.

That just leaves the seller to think about what VAT might do to their sale price. Do they simply add VAT at the checkout, or include it in the existing price (which will chomp into their profit margin)? Our article about VAT and pricing goes into the subject in more depth.

Learn more about our online accounting services, including VAT! Talk to one of the team on 020 3355 4047, or grab an instant quote online.

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

More posts by this author
Notify of
Inline Feedbacks
View all comments

Read more posts...

The Accountancy Partnership – Our Positive Reviews

Here at The Accountancy Partnership, we’re proud of our customer reviews The reviews we receive from our customers show how hard we…

Read More

What is a CIS Statement?

Back in the day (when tax returns were done through the post!), HMRC decided to clamp down on the construction industry. They…

Read More

Do Influencers Pay Tax?

The occupation of ‘influencer’ is more popular than ever, but there isn’t much information out there on how to pay taxes if…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.


You will receive our bookkeeping software Pandle for free, as part of your package.

You can use this to complete your own bookkeeping, or we can provide a quote to complete your bookkeeping for you.

Please select and option below:

I will do my own bookkeeping
I want you to do my bookkeeping

Call us on 020 3355 4047 if you’re not sure.