Charities: VAT on B2C e-commerce in the EU and UK

What has changed?

A number of changes to EU B2C e-commerce sales were introduced on 1 July 2021 which affected the way in which goods sold from the UK direct to EU consumers are treated. These changes included:

• Abolition of the EU low value import threshold of €22.
• One Stop Shop (OSS) replaces MOSS (Mini One Stop Shop) and covers B2C electronically supplied services and intra-EU distance sales of goods.
• Import One Stop Shop (IOSS) for low value imports from outside the EU (now including the UK).
• Introduction of a blanket distance selling threshold across all EU member states of just €10,000.
• Requirement for Online Market Places to be ‘deemed suppliers’ for consignments valued less than €150.

Although these changes have been in effect for over a year now, there are some practical key points that we are encountering with clients.

Why is it important?

With the loss of a number of EU simplifications as a result of Brexit, we are experiencing more and more clients suffering increased costs, negative customer experience or even overseas VAT registration obligations, as a result of these changes.

What are the key points to think about?

1. Although these changes were introduced from 1 July 2021, there is still a lot of confusion in the sector with regards to these types of supplies.
2. However, it’s not all doom and gloom. Although the changes create challenges, there are solutions for B2C sales of goods to EU consumers.  
3. There are a number of options out there and not a one size fits all solution. Organisations need to consider the commercial implications, customer satisfaction and the best option for them.
4. Correct implementation is key. A solution set up correctly from the outset will result in a lower risk of errors and problems going forwards.

We appreciate that the rules around VAT on the movement of goods from the UK to EU consumers can be complex and the introduction of various one-stop shops had added further layers of complexity. Therefore, we have produced the following action plan to help organisations navigate VAT on the movement of goods from the UK to EU.