Special Rules for Retail Goods
Online sellers will need to consider the changes to the VAT rules that arose on 1 January 2021. UK VAT is no longer chargeable on goods shipped to EU customers and the Distance Selling rules no longer apply. It may therefore be necessary for UK suppliers to register for VAT in other EU countries, although this might not be a requirement for some businesses selling through online marketplaces. We have already assisted many online traders manage their VAT requirements and can assist with overseas VAT compliance where required.
Online Service Providers
The VAT rules around the provision of online services (including ‘electronic services’) is complex and likely to cause issues for those businesses (even small businesses) who have EU customers. The pre-Brexit UK Mini One Stop Shop arrangements are no longer available, and many UK businesses have become liable to register for VAT in the EU.
However, there is now an alternative EU One Stop Shop VAT registration process that simplifies the EU VAT process. Although an EU VAT registration will be required by many UK businesses, they will be able to submit a single EU VAT return to cover sales in all EU countries. We can ease the burden by helping clients with their EU VAT registration requirements. We also have the knowledge and overseas networks to assist online service providers manage their ongoing EU VAT compliance requirements.
VAT and Retail Promotions
Because retailers/online sellers regularly use promotions to attract customers, there may be opportunities to make VAT adjustments where discounts, vouchers, or other promotions are used. It may also be possible to obtain retrospective VAT refunds where adjustments have not been previously made. We have the expertise to help retail and online clients unlock VAT opportunities.
