February 09, 2021
New rules were expected at the end of the Brexit transition period. And the same are clear now. Till Dec 2020 tax relief was there on import VAT if the amount was under £15. This was known as LVCR - Low-Value Consignment Relief. No import VAT was to be paid if you imported goods from EU (known as acquisition then) under £15.
There is no Low-Value Consignment Relief now. LVCR has been withdrawn with effect from 1 January 2021.
The low value import threshold for UK businesses is now £135.
Low Value Imports to B2C
If the goods are sold to the end user, new rules for VAT on shipments from the 1st January 2021 are as below.
Goods under £135
Goods over £135.
Low Value Imports to B2B
No VAT is to be charged
If goods under £ 135 are sold to UK businesses by a business overseas, no VAT needs to be charged.
Paying the VAT
The above applies to both B2B and B2C sales. Thus, the rules are not different in case of imports through an online marketplace. However, for convenience the seller can print customs invoices, showing that the VAT has already been paid by the customer. Many online marketplaces provide this option which saves time at the border.
VAT accounting can be complex and tiring if the rules are not known. If HMRC do not get VAT return on time, it may levy penalty. The same applies for late VAT registration. However, we are there to assist for all VAT services. Contact us for VAT registration or to file VAT return on HMRC. We provide all services under one roof at a fixed fee.