VAT Director Rayner Essex
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The idea of a 'Brexit' represented via jigsaw puzzle
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Two OSS schemes start on 1 July 2021

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There are two major VAT schemes starting in July 2021 which relate to sales to EU consumers (B2C) and will affect the retail sector. However, these two schemes are designed to achieve slightly different outcomes.

18th Jun 2021
VAT Director Rayner Essex
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This Import One Stop Shop (IOSS) scheme covers sales of goods which are located outside of the EU at time of sale, with those goods going to EU consumers. See my preview of IOSS in April and more details about registration. This article is focusing on the other scheme: One Stop Shop (OSS).

One Stop Shop (OSS)

This scheme covers sales of goods under the value of £135/€150 which are located inside the EU at time of sale, with those goods going to EU consumers.

One Stop Shop replaces the existing EU distance selling threshold rules. To be clear, distance selling threshold/rules no longer apply to stock located in Great Britain (GB), but a GB business may hold stock in the EU and distance selling regulations would then apply.

Historical Situation

Jigsaws UK holds stock in the UK and sells to EU consumers (B2C).

Under pre-Brexit distance selling rules, Jigsaws UK would charge UK VAT on sales to EU consumers, but if the value of sales to Italian consumers exceeds €35,000 threshold, Jigsaws UK was required to register for VAT in Italy and start charging Italian VAT on those sales, even though the stock was in UK at time of sale.

Post Brexit, distance selling doesn’t apply to Jigsaws UK, sales would be zero-rated exports and the customer liable for import VAT. Alternatively, Jigsaws UK could register for Import One Stop Shop (IOSS) and charge VAT based on the consumer’s location but this means the customer does not have a demand for payment before the goods are delivered.

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Replies (2)

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Caroline
By accountantccole
18th Jun 2021 13:26

Thank you - my brain hurts....

Thanks (0)
Replying to accountantccole:
avatar
By Hugo Fair
18th Jun 2021 19:11

Likewise ... but I have the answer: Stop all export activities!

Thanks (3)