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

x

There are special rules for charging, collecting, and paying VAT on low value goods which are imported into the UK. It can get a bit complicated, so we’ll explain what’s classed as a low value import for VAT purposes, and what your responsibilities are.
 

What is a low value goods import?

Who collects the VAT on low value imports?

Low value imports by UK customers for personal use (B2C)

Low value imports made by UK businesses (B2B)

VAT on imports bought through an online marketplace

For VAT purposes this refers to goods imported into the UK with a value of £135 or less. The value is worked out based on the total consignment of goods, rather than the value of separate individual items within it.

The rules for collecting VAT on low value shipments coming into the UK depend on whether the buyer is a business, or a regular consumer. There are different rules for selling through an online marketplace.

B2C imports are where the end customer buys goods from overseas for their own personal use. Under the low value import rules, these customers should pay VAT at the point-of-sale if the shipment’s value is less than £135.

Point-of-sale means exactly that, the point at which the sale is made. This means that the seller is responsible for charging UK VAT on the sale.

Does the seller need to register for UK VAT?

Yes, these changes mean that the seller (or their postal service) must register for UK VAT in order to charge it to the UK customer. Watch our introductory video to UK VAT if you need to know more about this, or carry on reading below.

 

 

The customs invoice will need to show that VAT has been paid so that the goods can enter the UK. Sadly, this extra work means some sellers no longer want to ship to UK consumers.

What if the shipment is worth more than £135?

UK customers won’t pay VAT at the point-of-sale if the shipment’s value is worth more than £135. Instead, the customer will pay import VAT and duty at the border as usual.

The seller won’t have to register for UK VAT, and they won’t need to show VAT on the customs invoice. It does mean that the customs invoice must show the shipment’s value is higher than the £135 threshold.
 

Comprehensive VAT return service

From only £40.00 per month

Learn more

If the buyer is a UK business, (so it’s one business selling to another, rather than selling directly to a customer who is buying something for personal use), then the seller doesn’t need to charge VAT on the sale as long as:

How will I pay the VAT?

If your business buys low value goods from a business overseas and you import these goods into the UK, the way that you pay the VAT depends on whether or not you’re VAT registered.

You might also find it useful to learn more about the way VAT registered businesses can account for import VAT using postponed accounting.

A UK customer buying goods from overseas through an online marketplace (such as Etsy or Amazon) will pay VAT at the point-of-sale. The difference here is that it’s the marketplace which must register for UK VAT, not the individual seller using the platform. This is true whether the goods are for a business (B2B), or for personal use (B2C).

Many online marketplaces have options for sellers to print off customs invoices where goods are being shipped overseas. This will show that VAT has already been paid by the customer, which will help shipments avoid delays at the border.

Learn more about our online accounting services. Call 020 3355 4047 to talk to the team, and get an instant online quote.

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
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Read more posts...

Do I Need to Pay Tax if I Drive for Uber?

Uber is a platform that connects its users to drivers who can either provide them with a lift or drop food off…

Read More

Mental Health for the Self-Employed at Christmas Report

Self-employment can often be an attractive prospect, with more opportunities for flexible working and creative freedom. The responsibility of being your own…

Read More

Claiming R&D Tax Relief for Businesses

Limited companies involved in research and development (R&D) activities may be able to claim different types of tax relief against their Corporation…

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.

Bookkeeping

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.