As early as mid-to-late October, Amazon issued a new notice to sellers on the "UK e-commerce VAT regulations" , indicating that the UK will officially withdraw from the EU single market and customs union on January 1, 2021. From this date, the UK will introduce a new set of VAT rules. Among them, the biggest change is that the VAT on the UK site will be collected by Amazon from next year.

Although Amazon has already sent emails to inform sellers that the UK will implement new VAT collection rules, today Amazon again notified sellers in the form of background news that the change in VAT regulations will take effect on January 1, 2021, which shows the importance of this change.

Although there has been a detailed explanation of the changes in VAT regulations in the email, many sellers still expressed confusion about this policy. Today, the editor will provide you with an introduction to the changes in VAT regulations on various platforms after Brexit and how to deal with them.

Amazon to collect UK VAT from January 1 next year

In the previous email, Amazon also clearly stated the two situations in which Amazon collects or does not collect VAT on behalf of customers:

In addition, there are several changes in the new VAT regulations that sellers should pay attention to:

• The current VAT exemption for goods with a sales value of less than £15 has been removed. Now, all goods you sell will be subject to UK VAT.

• If the shipment value of these sales does not exceed £135, UK VAT must be collected and remitted by Amazon.

• If the shipment value of the goods you sell is over £135, you will still be responsible for paying VAT and any import duties yourself, as you do currently.

That is, from January 1, 2021, goods delivered to UK customers from warehouses in or outside the UK will no longer be tax-free. At that time, Amazon will calculate UK VAT and charge fees on these sales, regardless of their value.

Many sellers on the UK site said after seeing the above news: This is simply the end of small and light items, and it is becoming increasingly difficult to do business on the European site.

However, with Brexit, not only Amazon but other e-commerce platforms will also be subject to the new UK VAT regulations.

eBay will also collect UK VAT on behalf of its customers from January 1 next year

Recently, eBay announced that it will collect and pay UK value-added tax on behalf of merchants starting from January 1, 2021.

It is learned that eBay's rules for collecting and paying UK VAT apply to the following situations:

● For goods imported into the UK and sold to consumers in the UK with a value of no more than £135.

● For non-UK business sellers, goods pre-warehoused in the UK and sold to UK consumers. The UK will cancel the current VAT exemption for low-value goods imported into the UK with a value of no more than £15.

At the same time, from March 1, 2021, eBay will require all listings on eBay UK and eBay EU sites to provide VAT rates.

In this regard, sellers are advised to immediately check and amend their listings on eBay UK or any eBay EU site to provide the applicable VAT rate. If the seller does not have any EU or UK VAT number (VAT ID), when modifying existing listings or creating new listings, the seller can fill in 0% in the VAT rate column.

The impact of the new UK VAT regulations on sellers

In fact, as early as October, when Amazon released a notice about the change in UK VAT, it reminded sellers to pay attention to this change. As soon as the news came out, many sellers on the European site were not calm, and various opinions emerged.

Some sellers support this view and believe that it is a good thing for Amazon to pay taxes on behalf of others, so that everyone can pay taxes in a formal manner.

         ▲ The picture comes from Zhiwubuyan

But some sellers disagree: Amazon is only paying on behalf of the seller, and the service provider still needs to declare the tax. In this way, the seller not only has to pay the actual tax, but also the agency fee.

Some sellers also mentioned the issue of the future selling price of the product: If tax evasion cannot be achieved, the price must be increased, and my selling price will not seem so expensive~

       ▲ The picture comes from Zhiwubuyan

But more sellers have a negative attitude towards this change and are also worried about the future survival of the European and British sites.

"Such a high VAT? Too harsh. My capital is at risk..."

"This will fatten Amazon's pockets, and sellers will suffer huge losses."

"The UK cannot report a lower amount, or it will be in trouble."

"If we keep doing this, everything will be in tatters."

In fact, the biggest impact of the platform's collection and payment of value-added tax on sellers is increased costs and reduced profits. As a result, it is inevitable to increase product prices, but consumers may not be willing to pay for them. In the end, it is difficult to predict whether the sales volume of the UK site will be considerable, and the probability of subsequent customer refunds will also increase.

For sellers who ship their own goods in the UK, most of their products are small items. In addition, the cancellation of the £15 VAT exemption policy will reduce their price advantage, making many sellers who ship their own goods feel the pressure doubled.

As the day for the implementation of this regulation is getting closer, sellers must pay attention to it, familiarize themselves with the specific changes in the rules, and make preparations early.

In response to the changes in Amazon UK VAT regulations, sellers need to confirm and implement the following two points in a timely manner:

▼Please ensure that the details of your Seller Central account are up to date - you will need to review and update your company registration address, as well as the actual "shipping address" information.

▼The market price published on Amazon always includes VAT.

In addition, sellers must adjust their products according to local government requirements and platform rules. At this time, they can consider abandoning some products in the red ocean with low profits. In addition, they should try to enhance the advantages of supply chain and logistics , while doing a good job in product branding, using FBA more often, and doing a good job in VAT declaration.

The above is a detailed explanation and response method for the changes in the UK VAT regulations. I hope that sellers can put it into practice, pay attention to this change, and prepare for Brexit as early as possible.

I wonder what sellers think about Brexit and the platform's collection and payment of VAT. Welcome to leave a message in the comment area~

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