VAT Impacts for Customers in the UK

VAT treatment of overseas goods shipped to the UK have changed

From 1st January 2021, HMRC introduced a new model for the VAT treatment of goods arriving into Great Britain from overseas. This is intended to ensure that goods originating in the UK, EU and non-EU countries are treated in the same way.

The new regulations require overseas vendors to collect VAT on all orders that do not exceed £135, and to pay this to HMRC directly. Orders that have a value that exceeds £135 will be processed in the same way as previously.

As an overseas vendor, we are now required to register for a VAT number, file VAT returns, and make payments via Direct Debit from a UK bank account. As a company that is registered in the USA this essentially requires us to create a new operating company in the UK.

Our new €165,00 minimum order value for shipments, with delivery duty unpaid (DDU)

Unfortunately, as a small company in a niche market we simply do not have the resources to manage this new regulatory burden and the administrative overhead that it introduces. Hiring additional resource to manage this new requirement is not a viable option due to the small size of the UK markets in proportion to the rest of our business.

Rather than refuse sales to residents of the UK entirely, by shipping only orders with a value of more than €165,00 we are able to avoid the VAT collection and filing requirement.

As long as this trade barrier remains in place, all orders that are shipping to the UK must have a value of at least €165,00 before VAT, duty, and shipping costs, so that they may be processed under the standard WTO rules (as previously).

We are aware that €165,00 is a little higher than £135, but with fluctuating currency conversion rates this gives us a little wiggle room to play with rather than have to adjust the threshold on a constant basis - as our eCommerce platform is unable to to apply a block on order values for any currency other than Euros.

As has always been the case, our goods are sold without including VAT and duties - which you can pay during checkout.

We appreciate your continued support, patience, and understanding in this matter.