Brexit: Overseas Consignments to UK Customers – Ready or Not?

From 1 January 2021 there will be new rules in respect of the supply of goods from overseas to Customers in the UK.

Where goods are sold at £135 or less, VAT will need to be accounted for at the Point of Sale, rather than at the Point of Importation.  HMRC’s guidance on these changes can be found by clicking here.

The rule change will introduce a requirement for overseas suppliers of goods to register for VAT in the UK unless the supplies are made via an Online Market Place (“OMP”) in which case, the OMP will be required to account for the VAT.

Reasons behind the Change

The new change is firstly an attempt to protect UK business.

Previous Low Value Consignment (“LVC”) rules meant that VAT was not considered in respect of the importation of goods valued at under £15.  Many traditional retailers believed that online businesses exploited these rules by trading from outside the EU and questioned the values detailed on import documentation.  The LVC rules no longer apply after 1 January 2021.

The fact that VAT will need to be accounted for at the Point of Sale should mean that VAT will not be a factor in a customer’s choice in sourcing its goods from a UK or an Overseas supplier.

Though Simplified Import Declarations will be required; Import VAT will not be due to enable the goods to enter the UK and it is therefore hoped that the rules will enable goods to be delivered to customers smoothly.

The Implications

If an overseas business supplies goods initially located outside the UK to a UK Customer that are valued at £135 or less, then it will have a liability to register for VAT in the UK and account for VAT.

This will not be the case if the goods are sold via an OMP.  In this instance, the OMP will be required to account for the VAT due.

The supplier of the goods can still register for VAT in the UK, but it would be treated as making zero-rated supplies to the OMP.


The rules will not apply to the transfer of the following types of goods:

  • Non-commercial consignments
  • Consignments containing any goods that are subject to Excise Duty (such as Cigarettes and Alcohol)
  • Goods moving between Northern Ireland and the Rest of the UK; and
  • Consignments from Jersey and Guernsey that are covered by the Import VAT Accounting Scheme.

It is also the case that if the overseas supplier obtains the UK VAT Number of its customer and meets the rules for invoicing it may be possible for the VAT to be accounted for by the UK customer as a ‘Reverse Charge’ click here for more information.

For more information on how Brexit may impact complex supply chains please contact our VAT team on

For more on our Brexit articles click here.

Posted in Brexit.