Expert Opinion: VAT and sales to EU consumers

Stockport accountancy firm Hallidays have partnered with VAT specialists and fellow Xeinadin Group company, Centurion VAT to explain how Brexit has changes tax rules when selling to consumers in the EU.

As part of the EU’s initiatives to help remove administrative burdens on EU trade between its members there are some important VAT changes that UK businesses may also be able to access for their B2C sales from their own websites to EU private individuals or consumers.

1. B2C services

Following the departure of the UK from the EU, from 1 January 2021 UK businesses that sell broadcasting, telecommunications or electronically supplied services to EU consumers have been able to register for the non-Union One Stop Shop (OSS) to account for EU VAT on their sales across the EU states instead of having potentially multiple EU VAT registrations to account for their EU sales.

VAT changes from 1st July

From 1 July 2021 the option to use the non-Union OSS is being extended to cover other services to consumers where the place of supply for VAT of the services provided by the supplier is in the EU and which until 1 July would require an EU VAT registration. The OSS extension list includes, for example, supplies related to land that is located in the EU and admission charges to various EU-based events.

2. B2C goods

Many UK businesses that sell goods to EU consumers (B2C) have been impacted by the EU/UK export and import changes from 1 January 2021, some having to change their delivery arrangements and pricing and unfortunately some even ceasing to sell to the EU as a result. It’s good news then that from 1 July 2021 the EU has confirmed the introduction of the optional Import One Stop Shop Scheme (IOSS) which will help many UK businesses who sell low value consignments of goods to EU consumers. Using a special monthly EU IOSS return, an IOSS registration will allow a qualifying UK business to charge, collect and report EU VAT on their sales of EU imported goods rather than having to register for VAT wherever they make imports into the EU. The IOSS scheme will allow qualifying imports to be made to the EU without the payment of import VAT and should help to improve pricing clarity for customers and control over deliveries.

Registration for IOSS can be made in any EU state of choice and pre-registration for the scheme is available now.