Shropshire businesses who have adapted their operations to include a stronger online sales presence due to Covid-19 must make sure they are ready for rule changes on the horizon.
Matt Orange says the Coronavirus pandemic has driven many businesses to increase their digital market place offering in a bid to survive.
“This new approach, together with a general increase in consumer spending online, and with the end of the Brexit transition period on the horizon, means that there’s a pressing need for retailers to familiarise themselves with a series of tax changes in 2021.”
Matt says the changes will affect both UK businesses selling goods to non-business customers in the EU, and overseas businesses that sell goods to non-business customers in the UK.
“The changes involve the way VAT is accounted for on sales, and businesses must make sure they have a clear understanding of how they may be affected.”
From January 1 2021, UK sellers will generally be able to zero-rate their sales to customers in the EU – but the goods will be subject to import VAT when they arrive in the EU country where the customer belongs.
“As a business, you may need to make arrangements to pay the import VAT on the delivery so that your customers don’t face an unexpected extra bill when they receive the goods,” said Matt.
“If you’re a business selling on platforms such as Amazon or eBay, you will need to check the details on their seller pages as they will be changing their rules on selling goods in the EU.”
And it’s not just at the turn of the year that rules will be changing – Matt says there are more changes currently planned to take effect from July 1, 2021.
“These changes will involve the way VAT is accounted for on goods sold by online marketplaces to customers in the EU. You will need to plan carefully to understand whether your business will need to register for VAT in various EU member states and to find out what steps you’ll need to take. Similar changes are also planned for overseas sellers selling goods in the UK from January 1, 2021.
“There are complex arrangements to be taken into consideration, and it’s vital that businesses seek professional advice if they think they will be affected – the sooner you get effective guidance, the sooner you can start to prepare.”
Matt Orange, Client Manager