The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note looks at the special rules that apply to imports of consignments valued at £135 or less which are located outside the UK at the point of sale.
For importing goods from outside the UK generally, see the Imports ― overview (rules from 1 January 2021) guidance note. For movements of goods and Northern Ireland, see the Northern Ireland ― overview guidance note.
In-depth commentary on the legislation and case law can be found in De Voil Indirect Tax Service V3.305.
Where a consignment of £135 or less is sold directly to a customer in Great Britain and the goods are located outside the UK at the point of sale the place of supply for VAT purposes is deemed to be the UK. The effect of this is that overseas seller must normally register for UK VAT and account for VAT at the point of sale.
However, where the supply is business to business and the customer has a valid UK VAT registration number, then a ‘reverse charge’ applies. This means that the overseas seller is not required to account for the UK VAT and instead the customer ‘self-accounts’ for the VAT due. The customer effectively treats the goods as supplied both to and by itself. This is a very similar mechanism to the reverse charge which applies to services bought in from overseas, for which see the Reverse charge ― buying in services from outside the UK guidance note.
To ensure that the reverse charge is legitimately applied, the overseas seller should check the validity of the VAT number using the UK’s online service for checking VAT numbers. It should also add a reverse charge narrative to the invoice (for example, ‘reverse charge: customer to account for VAT’).
No import VAT is due on consignments covered by these rules when they are brought into the UK. This is
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