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UK Import VAT
I think I've asked this previously but we're getting closer now, so how are BO going to handle HMRC's requirement that as of July, online marketplaces must collect the Import VAT for orders entering the UK? Or is there a volume threshold that makes it not apply to BO?
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printed paper/books (and some other stuff) can indeed change as well
1. Sellers who have registered to pre-pay import VAT on orders shipped to the UK. These sellers should pay VAT to the UK tax authority on orders with a value of less than 135 GBP which means that the VAT on these orders should also be charged to the buyers (unless you expect sellers to pay the VAT out of their own pocket). And this also means that there should be a setting for sellers to indicate that they have registered.
2. VAT-registered sellers in the EU who have not registered to pre-pay import VAT (and orders of more than 135 GBP for sellers who have registered). These orders should now have 0% VAT.
3. And the other way round, VAT-registered sellers in the UK selling to buyers in the EU should have 0% VAT on those orders.
2. They can just remove the UK from their existing tax profile https://www.brickowl.com/mystore/settings/tax_settings
3. They can also change their tax profile to only apply to the UK https://www.brickowl.com/mystore/settings/tax_settings
https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021#goods-located-outside-the-uk-at-the-point-of-sale
With regards to the references to OMP, Brick Owl doesn't meet the UK/EU definition of an Online Marketplace for the purposes of this legislation
Unless I'm reading that document incorrectly they expect EVERY seller outside the UK (including us in USA) to register? Are they nuts? Or am I misinterpreting ?
If it is the case how do they plan on enforcement of that rule?
But yes, if BrickOwl decides not to facilitate UK VAT by registering as an OMP and complying with the legislation, every seller who decides to ship to UK customers will need to register for a UK VAT number and collect/discharge VAT, or risk having their packages seized or returned by British customs.
a) the processing of payments in relation to the supply of goods
b) the listing or advertising of goods
c) the redirecting or transferring of customers to other electronic interfaces where goods are offered for sale, without any further intervention in the supply"
In my understanding of the wording for "a)", Brick Owl does not process the payments for the goods. We provide the technology platform where stores can choose how payments are processed, and they are then processed via PayPal/Stripe etc. As opposed to other platforms such as Amazon/Deliveroo where the payment processing is done by Amazon/Deliveroo itself and the store has no control over the payment processing. Therefore we would only meet point "b)".
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HMRC’s definition of an online marketplace is a business using a website or mobile phone app (such as a marketplace, platform or portal) to handle the sale of goods to customers which meets all of the following conditions:
* in any way sets the terms and conditions on how goods are supplied to the customer
* is involved in any way in authorising or facilitating customers’ payments
* is involved in the ordering or delivery of the goods
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The third point is the one you might argue doesn't apply, but it depends on interpretation. BO is not directly involved in ordering or delivery, but facilitates the ordering process which may be enough. It's a while since I've worked at HMRC but I suspect what that point is trying to exclude is a forum where users are permitted to arrange trades amongst themselves.
The a/b/c points you list above, I think, are also included to specifically exclude those who only do one of those things. Point A excludes payment providers, point B excludes craigslist and the like, and point C excludes aggregators like Google Shopping.
The bottom line is that they have introduced the OMP legislation so as not to have 100,000s of individual sellers - many of whom don't even deal with their own tax authorities - from bombarding HMRC with registration requests, annual filings, queries, requests, etc. and all the nonsense that follows on from that such as sending out payment requests, default notices, filing reminders, etc. They'd much rather deal with 50 marketplaces and have them do the hard work of collecting and remitting.
I would normally recommend you get professional advice but this is all so new that I'm sure even accountants of many years experience may not be 100% clear on it all. Contacting HMRC may be a good option but the quality of advice does depend on who you get to speak to.
IMO, it would also be in BrickOwl's best interest to register as such because what will occur is that the UK will become like an island. Many sellers will not bother with VAT registration with the UK as it simply isn't worthwhile for the # of sales to that one country alone, and the other marketplaces that we sell on already will be taking care of this (as they're all registering as OMPs). And thus sellers from outside the UK will simply stop shipping to the UK altogether (I for one, am in this boat and I know I'm not alone). What this means is that UK buyers will no longer be able to use BrickOwl to purchase outside of the country and may have to use other OMPs where the VAT is being handled automatically for sellers. There may be a few sellers that opt to go through the whole VAT registration, but unless they're a really really big entity, I can't see that happening for most.
I also love the way that recent updates are now popping up at the top with an Acknowledge button, Much easier to see these. Thank-you!
We will also need to handle zero rated VAT for instructions
In reality how all this will work remains to be seen and I am sure we will quickly receive feedback.
One thing is certain, domestic sales will likely grow
But is there anything UK Sellers have to do when sending to a Buyer outside of the UK other then sticking a Customs Label on the package?
I'm a little confused on much of the legalities. Still need to wrap my head around it all.
And for VAT-registered UK sellers: VAT should only be charged on orders from buyers in the UK. Orders from buyers in the EU should now get 0% VAT just like it was already for orders from buyers outside the EU.
https://ras.brickowl.com/store/lego-insp-mat-for-3148-in-72807
Perhaps such 'magazines' need moving to the instructions category if that's possible? I believe there are a few Super Heroes one too.
While I'm sorry to see our UK peers now need to pay VAT on all out-of-country orders, I'm glad UK customers will still be able to easily find and purchase LEGO outside of the UK through this platform.
It's a difficult area and I would think the easiest way to deal with it is to shift all zero-rated items to their own category titled printed materials or something, retaining the paper category for the cardboard cut-outs, printed backdrops and so on.
Again though, my HMRC experience is many years out of date, please check with your guys when you can. I'm just trying to draw attention to things that may need some consideration.
I don't believe the rules on printed materials are the same across the EU. Perhaps it would be better to allow sellers to tag their own lots as zero-rated.
Just asking.
I got a problem here, i am a french reseller but with a particular status (like few seller here) that is i sell products without french VAT. I have no VAT applied.
Today i made my 1st sale to a UK customer and the 20% UK taxes does apply automaticly but :
- This is now part of my gross sale/net sale (wich is the same because i dont have VAT)
- Meaning that i will pay brickowl fees on those 20% UK taxes
- Meaning that i will pay French taxes on those 20% UK taxes
taxes on taxes this is nonsense...
Have someone some explainations about that ?
thx !
Attached is a screenshot of Ali*****ss marketplace. The TAX is collected from the Order Total.
And as far as I have read on the net it is right that shipping cost needs to have UK VAT collected too
Yes, the 135 GBP limit is on items value only.
My understanding is that all OMPs are required to collect VAT on sales, and that any company that sells to UK customers, but does not sell through an OMP, needs to register with a VAT number.
So my question is, if I am a company in Canada that sells through an OMP (BrickOwl) to a UK customer, how to do I ship the goods to my BrickOwl customer without them having to pay the VAT again when the package hits customs? Do you have a BrickOwl VAT code or something I can attach to my parcel?
How customs know that VAT has already been paid is something that's not yet clear. For now, I would suggest including a printed invoice (the BO is fine as it shows the VAT/VAT number) within a clear envelope on the outside of the parcel.