FINAL WORD
SALES SUCCESS
VAT loophole closes on foreign online cartridge sellers Now we are through the Brexit transition period the government has introduced a new model for the VAT treatment of goods arriving in Great Britain from outside of the UK that will ensure that UK businesses are not disadvantaged by competition from VAT-free imports
T
he new model
that HMRC investigated sellers that were
addresses the
clearly not compliant before January 1.
problem of overseas
“The government has done a great job
sellers failing to pay
of finally flushing these cheats out of the
the right amount
undergrowth,” he said.
of VAT on sales of
goods that are already in the UK at the
Here are the relevant key measures:
point of sale.
For imports of goods from outside the
The change was made further to a
UK in consignments not exceeding £135
report by the Commons Public Accounts
in value (which aligns with the threshold
Committee in 2019 which found that
for customs duty liability), the point at
thousands of, mainly Chinese, sellers
which VAT is collected shifts from the
were evading the tax by using fake VAT
point of importation (import VAT) to the
numbers and shell companies to sell
point of sale (supply VAT) which will put
products in effect tax-free.
the onus on online marketplace companies
“Since 1st January 2021, online prices advertised by many non-UK businesses
Steve Clayton CTS Toner Supplies ltd
such as Amazon and eBay. For goods sent from overseas and
The abolition of low value
have increased by around 20%. This
sold directly to UK consumers not
consignment relief, which relieves import
reveals the huge cost to the taxpayer over
through an online marketplace open
VAT on consignments of goods valued at
a long period of time, something we could
market purchase (OMP), the overseas
£15 or less, will position UK retailers more
really do without in the current climate,”
seller will be required to register and
competitively for inkjet sales.
said Steve Clayton, MD of CTS Toner
account for the VAT to HMRC.
Supplies Ltd.
For goods in the UK at point-of-sale
This measure, and the £135 threshold on imports, covers the majority of low
HMRC estimated that the fraud across
sold by an overseas seller through an
value online cartridge sales and is a
all online sites could be losing the taxpayer
OMP for sales of goods irrespective of
massive fillip for our customers, UK
more than £1 billion a year. Richard
value the responsibility for accounting for
retailers – and, especially, online sellers -
Allen, of the group Retailers Against
VAT will move from the overseas seller to
who will now be more competitive against
VAT Schemes, said it was imperative
the OMP.
Chinese e-tailers.
www.dealersupport.co.uk JANUARY 2021 [47]
