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Posted: Tuesday, July 20, 2021
As discussed in one of our most recent blogs, the UK’s move away from the European Union (EU) was hardly the smoothest of transitions. But things haven’t stopped there. Thanks to the recent introduction of new EU VAT rules, UK suppliers are now having to make changes to how they sell their products to European customers.
What does this mean for your business? Read on to find out more.
Rules have changed in order to make sure that VAT is charged by location. This amount may differ depending on the consumer’s country of origin. It is hoped that this new system will reduce opportunities for fraud and foster more even competition between suppliers.
As part of this new way of doing business, UK sellers will need to add the VAT rate of their customers’ respective countries to a product at the point of sale.
It’s hoped that the introduction of a new One Stop Shop (OSS) EU Return will also make things simpler. Building on the Mini One Stop Shop (MOSS) service that has been active since 2015, the OSS removes the requirement for businesses to register for VAT in each country that they trade. This fresh approach means that non-EU businesses will be able to nominate one EU country in which to register themselves, allowing them to list all EU sales in the space of one return.
The EU has also introduced a new imported goods scheme for products or goods with a value of less than €150. As with the OSS, non-EU businesses selling to EU consumers will need to register for the Import OSS (IOSS) scheme in an EU member state of their choosing. The supplier must then charge VAT, at the customer’s local rate, at the point of sale in instances where the purchase total is less than €150. This should then be declared via an IOSS return.
Following this, when goods are imported, these sales will become exempt from VAT.
Lastly, the new EU rules place responsibility for the charging and collection of VAT firmly with online marketplaces. If imports don’t reach the €150 mark, VAT will be added on at the point of purchase. This may be beneficial to some non-EU suppliers and may free them from certain VAT obligations.
At Trads, we supply traditional and contemporary cast iron radiators to consumers both inside and outside the EU. Those who purchase from us find it hard to resist the quality and craftsmanship of all of our models, and we’re immensely proud of the reputation we’ve managed to cultivate.
To discover more about us, or to purchase one of our products for yourself, visit our website today.