Changes to VAT treatment of overseas goods sold to customers from 1 January 2021
This note gives information on the changes to VAT treatment of overseas goods sold to customers from 1 January 2021.
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At the end of the transition period, the government will introduce a new model for the VAT treatment of goods arriving into Great Britain (England, Scotland and Wales) from outside of the UK. This will ensure that goods from EU and non-EU countries are treated in the same way and that UK businesses are not disadvantaged by competition from VAT free imports. It will also improve the effectiveness of VAT collection on imported goods and address the problem of overseas sellers failing to pay the right amount of VAT on sales of goods that are already in the UK at the point of sale.
This paper follows publication on 13 July 2020 of The Border Operating Model and expands on the sections covering the VAT treatment of consignments not exceeding £135 from 1 January 2021.
This paper does not cover matters specified in the Northern Ireland protocol. The government continues to work through the implications of the Northern Ireland Protocol, including in relation to VAT and excise. The government is committed to providing guidance on how the Northern Ireland Protocol will work ahead of the end of the transition period.
Updates to this page
Last updated 3 December 2020 + show all updates
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The definition of an online marketplace has been updated.
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Multiple updates including information about transactions before 1 January 2021, who should register for UK VAT and what online marketplaces (OMPs) must do.
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First published.