This guide is not intended to be a comprehensive guide to all the implications of Brexit. To learn more, contact your local tax authority or a tax professional.
The UK exited the EU VAT regime, Customs Union, and Single Market on 1 January 2021. All movements are now imports or exports, subject to UK or EU import VAT. All imported goods purchased are subject to VAT. The UK no longer has a low-Value Consignment Stock relief for purchases below £15.
I am a company based in the UK selling to other EU countries
UK businesses exporting to EU-based customers are VAT exempt. However, we always aim to produce your orders in the country of delivery, and orders produced locally will be treated as domestic sales of goods and are subject to local VAT.
In some EU countries extended reverse charge regulation applies, therefore orders produced locally will be treated as a domestic sale of goods and are subject to 0% VAT if you are registered with a valid EU VAT ID in the country.
Please note that from January 1st, 2021, a valid UK VAT ID is no longer valid in the EU for cross-border transactions within the EU. Sellers must register for UK VAT if they have been selling to UK consumers and must register for EU VAT if they have been selling to EU consumers.
I am a company based in a European Union member state (other than the UK) selling to the UK
Orders shipped from an EU country to the UK will be treated as exports of goods from the EU and therefore a reverse charge procedure will reduce the VAT charge on our invoice to 0%. Customers need to provide a valid VAT ID to apply the reverse charge procedure and must be attentive to the customer's obligation for such a tax collection mechanism.
- For purchases above £135 without a valid VAT ID, Gelato will need to report and pay import VAT through the customs processes on behalf of the customer.
- For purchases below £135, the VAT collection point has been moved from the point of importation to the point of sale. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments. In these cases, Gelato must collect and report VAT on behalf of the customer.
Please be aware that VAT and customs duties can be applicable if you do not have a valid UK VAT ID.
I am a company based in the UK selling to the UK
You are not affected by Brexit. All your purchases will continue to be treated as domestic sales with a VAT collection of 20%.
Where can I get more information about Brexit?
We recommend reading official information from the UK and European authorities, as well as additional resources listed below. If you are in doubt, please consult with a tax professional.
- Brexit - GOV.UK (www.gov.uk) https://www.gov.uk/transition
- Changes to the VAT treatment of overseas goods sold to customers from 1 January 2021 - GOV.UK (www.gov.uk)
- Relations with the United Kingdom | European Commission (europa.eu)
- Exports, sending goods abroad and charging VAT - GOV.UK (www.gov.uk)