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

Are you affected by the changes?


Posted by Roger Eddowes on 12/07/2021 @ 8:00AM

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 many changes to EU VAT now the Modernising VAT for Cross-Border-E-Commerce legislation!

There are many changes to EU VAT now the Modernising VAT for Cross-Border-E-Commerce legislation!

copyright: s. hermann & f. richter / pixabay

There are a number of changes concerning supplies 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.

Until next time ...

Business Godparent


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About Roger Eddowes ...


Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.