Along with the EU Single Market and Customs Union, the UK also left the EU VAT Directive on 31st Dec 2020. All goods exported from the UK, for either trade or consumers, are now zero-rated for VAT purposes. Typically EU customers then pay the ‘import VAT’ on goods they import from the UK before there are released from customs.
Leaving the EU VAT Directive means that UK companies also lost access to the Distance Selling scheme that had enabled them to sell to non-VAT registered customers in an EU Member State i.e. ‘non-taxable persons’ (consumers, small businesses, or charities and public bodies) without the requirement for a local VAT registration in that Member State. Under the scheme, UK VAT registered businesses were required to keep a record of all sales made over a calendar year to non-taxable persons in each EU member state. Providing the business did not exceed the distance selling threshold then it would not have had to register and account for VAT to the local tax authorities.
Post 31st Dec 2020, and the abolishment of the €22 Low Value Consignment Relief, goods shipped to the EU are now classed as exports, meaning that import VAT is levied on all UK goods entering the EU market. Many UK businesses, particularly e-commerce sellers have endeavoured not to impact the EU consumer experience by shipping Delivered Duty Paid (DDP). However, this leaves the UK company liable for the EU VAT which is not recoverable without having a local VAT registration (in each member state where it sells to), so this import VAT becomes a non-recoverable ‘cost’ that the company has to either pass on or absorb.
GTD has successfully obtained VAT registrations and EU EORI numbers in all of the major Member States, enabling UK B2C and B2B companies to appeal to a wider range of customers due to their perception of a much improved purchase and delivery experience.
If you are looking to improve the EU customer experience through better management of VAT and offering Incoterms® DDP, get in touch today, we’ll be delighted to help.
Our Global Trade Manager programme bolsters your company’s efforts by managing your entire international trade function; once your revenues justify bringing on full-time staff.
GTD supports companies to resolve some of these issues and more.
Most customs issues arise from inaccurate and incomplete documentation, logistics problems, and regulatory non-compliance.
GTD conducts on-site, customs audits, exploring processes, systems and documentation, detecting areas of non-compliance and helping ensure you are maintaining the correct data and documentation, and importantly, for the requisite time.
Global Trade Department has a 100% success rate of obtaining Full Authorisation for IP on behalf of clients. We work with clients to ensure that authorisation prerequisites are in place, and to understand their 3-year or 5-year forecasts (depended on commodity) for processing and/or repair.
Global Trade Department frequently advises companies on the exact compliance requirements surrounding Outward Processing, especially in the case of ‘replacement goods’ using either the Standard Exchange System (SES) or the Prior-Export Equivalents (PEE) process. We also have an excellent awareness of the evidence a company needs to supply and have a 100% success rate in applying for Full Authorisation on behalf of clients.
Obtaining authorisation to operate a private customs warehouse is just one of several facilitations or simplifications offered to UK established companies by HMRC to help reduce the burden of import duty and VAT.
Global Trade Department has worked with several clients to help them achieve this standard, considered to be a form of trust or self-auditing by HMRC. We are familiar with the evidence companies must show to demonstrate excellent standards of tax and customs compliance, record keeping, financial solvency, competence and professional qualifications, and safety and security.
GTD has successfully obtained VAT registrations and EU EORI numbers in all of the major EU Member States, enabling B2C and B2B companies to appeal to a wider range of customers due to their perception of a much improved purchase and delivery experience. If you are looking to improve the EU customer experience through better management of VAT and offering Incoterms® DDP, get in touch.
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Great Britain: Global Trade Department Ltd, Kingston House, Great Western Way, Swindon, Wilshire, SN5 8UB, Great Britain.
Global Trade Department Ltd is a company registered in England and Wales, Company no: 07000152. VAT no: GB994 7629 49
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Global Trade Department (NI) Ltd is a company registered in Northern Ireland, Company no: NI724330
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