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UK B2B sales e-commerce goods after 1 Jan 2021

On 1 January 2021, the UK ecommerce VAT rules changed on consignments not exceeding £135 and deemed supplier online marketplaces (OMP). This mirrored the 1 July 2021 EU e-commerce VAT package. A concession on business-to-business B2B imported sales of goods was made. Instead of output VAT being due at the point-of-sale on an import sale not exceeding £135, the transaction may be nil-rated.

UK VAT number reverse charge for zero-rating

If the business customer can provide the direct seller of facilitating marketplace with their UK VAT number, then the import can instead be zero-rated. The businesses then uses the reverse charge to report the sales and purchase in their VAT return on behalf of the seller or OMP. So there is no VAT paid.

The seller or OMP must note this on the invoice, so it is clear for UK Customs why no UK VAT has been collected. The note should mention:

  • reverse charge: customer to account for VAT to HMRC’.

There is no requirement for the seller or OMP to check that the VAT number they have been provided with is valid. Although in practise this is simple and can be done online with HMRC.

VAT Calc’s in live Calculator and Auditor  services produce real-time and accurate UK VAT calculations into your ERP, billing, e-commerce or e-invoicing systems.

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