EU VAT Changes Came In On The 1st Of July 2021

On the 1st of July 2021, the European Union's scheme called Modernising VAT for Cross-Border-E-Commerce came into force. These changes will simplify VAT obligations for any business making cross-border supplies for goods and services...

There are a number of changes concerning supplied of goods from businesses within the United Kingdom, although Northern Ireland is treated differently on goods, but not services as these fall under the Northern Ireland Protocol.

"So, what are some of the significant changes?"

Firstly, Low-Value Consignment Relief has ended, so anything with a value up to 22 Euros is now subject to VAT unless it's covered by another relief. The non-mandatory Import One Stop Shop (IOSS) scheme has begun, and this affects businesses outside of the EU who supply goods to non-VAT registered EU consumers with a value up to 150 euros.

Although IOSS is not mandatory, it does simplify customs processing somewhat. If you don't want to be part of the IOSS scheme, you now have two possible options:

- For the customer to be 'importer of record' so the import VAT is collected from the customer by the courier

- For the supplier to be 'importer of record' in which case they're making an onward supplied to the customer and is responsible for their own VAT and need to register in that member state

Additionally, the EU's OSS scheme (formerly MOSS) is extended to cover all B2C services as well as intra-EU Distance Sales of Goods. Although this will not affect the majority of UK businesses, it will affect those based in Northern Ireland.

There are many other tweaks and changes to EU VAT now the Modernising VAT for Cross-Border-E-Commerce legislation has come into force, so I'd recommend speaking to your accountant if you are affected.

If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.