The following has been reproduced from government guidance.
From 29 March 2019, if the United Kingdom (UK) leaves the European Union (EU) without a deal, the import VAT rules will change for goods worth £135 or less that are sold to UK buyers (including businesses and individuals). From this date, sellers outside the UK must pay the import VAT for any parcels sent to UK buyers after 11pm GMT, even if the goods were sold before.
These changes will apply if all the following circumstances are met:
- sellers outside the UK, including in the EU, non-EU and the Channel Islands
- goods worth £135 or less that are sold to UK buyers, including those worth £15 or less as they will no longer benefit from tax relief
- goods contained in parcels such as packages, envelopes or other items sent by post, express operator or freight.
The existing tax relief on goods worth £15 or less will not be introduced for sellers within the EU and will also be removed for sellers outside the EU, from 11pm GMT on 29 March 2019.
From 29 March, you can pay your import VAT on parcels in one of two ways:
- Register for the UK HM Revenue and Customs (HMRC) new online service to report and pay the import VAT due, or
- Pay a parcel operator that offers a service to pay import VAT to HMRC on your behalf
Action to take now
If you choose to report and pay the import VAT direct to HMRC, you should register for the new online service now, so you are ready to use it when the changes are introduced on 29 March 2019. To get started, you will need a Government Gateway user ID and password. If you do not have a user ID, you can create one when you register. You will also need your business contact details and details of your business accounting periods.
To use the online service, you will need to:
1. Register for the service
2. Choose an accounting period from those available
3. Keep records of goods worth £135 or less that you have sold to the UK for each accounting period
4. Work out the import VAT due on the goods you have sold to the UK for each accounting period
5. Tell HMRC how much import VAT you owe for each accounting period
6. Pay HMRC the total import VAT due for each accounting period
Once registered, you will be given a parcels reference. This reference should be included in documentation accompanying any parcels you send to UK buyers from 29 March 2019.
Article from ACCA In Practice