VAT Director Rayner Essex
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Brexit reality 7: Personal deliveries to a business address

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Brexit might cause problems for those who have their personal goods delivered to the workplace. Jason Croke reveals the challenges businesses may face when their employees return to the office.

5th May 2021
VAT Director Rayner Essex
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All those deliveries to home whilst remote working have been great, but as the country re-opens and workers gradually return to their business premises, they may encounter some unexpected problems with their personal deliveries sent to the office

The situation

Here is a typical scenario: an employee orders some goods from an EU website with a delivery address to the UK office where they work. Pre-Brexit, the seller would charge VAT at their local VAT rate and goods would be delivered to the office address with nothing further to pay.

Post-Brexit, if the value of goods is under £135/€150 then the EU seller should now be GB VAT registered and charging GB VAT. Those goods will not cause an issue if delivered to a business address as the shipping documents will show GB VAT has been charged, with no duty due as the value is under £135.

But where the goods are over £135/€150 then import duty may be due, and import VAT will be due; if the seller is not GB VAT registered, then the seller will zero rate as an export and customer is liable for import duty/VAT. 

But here’s the problem: if the delivery address is a business address, then the freight agent will most likely want an EORI number in order to process the importation.

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Replies (4)

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By Duggimon
06th May 2021 10:28

"no deliveries to the office" seems a good policy to adopt!

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By Robjoy
06th May 2021 11:04

I run a small business (limited company) from home. Deliveries are sometimes mixture of business and personal purchases. It will be interesting to see what might happen!

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By moneymanager
06th May 2021 14:50

Append the delivery address as "Care of"?

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Jason Croke
By Jason Croke
06th May 2021 15:32

As many employees work from home now then maybe not a big issue, but I thought it was interesting having had first hand experience with a client where they'd had some entries on their monthly postponed import VAT statements they could not marry up to purchase invoices and they just did the postponed process anyway (Box 1/Box 4/Box 7) but they were still uneasy and then we discovered the freight company had used the EORI number for what we found out were nothing to do with the business.

In the scheme of things, the Box 1/4 process is VAT neutral so maybe it doesn't matter for a fully taxable business, but a partially exempt business might have an issue and HMRC make take a view that the business cannot postpone the import VAT because that VAT belongs to an individual person who is liable for paying that VAT (they would have paid it if delivered to their home) and so there is a VAT loss potentially .

It's likely very niche, maybe just some initial gremlins in the first few months of Brexit, but thought it was still a useful scenario to share.

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