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As of 1 July 2021, new European VAT rules for business-to-consumers (B2C) transactions will apply, impacting suppliers of services, goods, marketplaces and postal couriers.
Why these new rules?
To ensure fair competition for EU suppliers;
To combat VAT fraud.
What’s new?
An extension of the optional declarative system to both B2C suppliers of services and goods, avoiding multiple VAT registrations and reporting obligations in the EU (called the One-Stop-Shop or OSS );
The abolition of the “distance sales threshold” and the creation of a unique and common threshold of EUR 10,000 throughout the EU up to which B2C EU cross-border supplies remain subject to the VAT rules of the Member State of dispatch, and above which supplies become subject to the VAT rules of the Member State of destination;
The fallout from Brexit will ramp up for the UK fashion industry when new European VAT rules for online direct-to-consumer transactions come into force on
Small businesses face £180m VAT hit from Brexit red tape
Many small companies must pay almost £7,000 a year to meet new Brussels rules aimed at cracking down on VAT fraud
20 May 2021 • 12:42pm
British online retailers are facing at least £180m in additional costs as the EU introduces new VAT rules on sales coming from outside the bloc.
Many small UK companies will have to pay €8,000 (£6,900) a year to comply with new rules set to take effect in July, according to consultancy Avalara.
The rules are aimed at cracking down on VAT fraud among predominantly China-based ecommerce sellers, the cost of which is expected to rise to €7bn this year.
Ahead of the report stage scheduled for 24 May, the government has tabled several proposed amendments to the Finance Bill 2021 including to the super deduction and non-resident SDLT surcharge. It has also proposed four new clauses and a new schedule concerning VAT.
Extension of super deduction and special-rate allowance
The new super deduction and temporary first-year allowance for special-rate assets are being amended to enable background plant and machinery in leased buildings to qualify for these allowances.
The government amendment, to be introduced in the report stage of Finance Bill 2021, will ensure that the allowances are available where a company purchases or constructs a building and fits it out with fixtures and other assets that contribute to the functionality of the building, or its site, as an environment in which commercial activities can be carried out. Such assets were previously excluded from attracting these allowances owing to the general exclusion of leased as