UK Based Global VAT and Tax Consultants

Brexit Update – Border Controls

On the 1 July 2020 the deadline for the UK to apply for the extension of the transitional Brexit period passed. Since the UK did not opt to apply for the extension in question, as of 1 January 2021 the transition period with the EU will end and the UK will leave the EU Single Market. This means that controls will be placed on the movement of goods between Great Britain and the EU.

In order to recognize the impact of COVID-19 on businesses to prepare for the changes, the UK government has decided to introduce the new border controls in  three stages: from 1 January 2021, from 1 April 2021 and from 1 July 2021.

At the beginning of July 2020 the UK government published a policy paper ‘UK Border Operating Model’ outlining the new processes per each stage of their implementation. The document can be found here:

UK VAT on B2C consignments of value below £135

As part of the above-mentioned paper, the UK tax authorities provided the details of the new UK VAT rules to be applicable from 1 January 2021 to online retailers selling goods to be imported into the UK with a value not exceeding £135. On such goods (excluding excise goods and gifts) UK import VAT will no longer be due at the border. In addition to that, the existing low value consignment import VAT relief will be withdrawn. Sellers will be required to register for VAT in the UK, charge UK VAT due at the point of sale and report it on their UK VAT returns. This mirrors measures pioneered by countries such as Australia and Norway.