I agree, but if China goes rogue and refuses to play ball, then what. Someone has to pay, hence my thinking it would be the customer, or at least, we would have to discouraged (from purchases).
Indeed, I assume the likes of fasttech are an online marketplace.
Compliance arrangements and invoicing
VAT invoicing obligations will apply.
The person liable to account for the VAT will be required to provide the customer with a full VAT invoice at the point of sale - this obligation will fall on either the seller (for sales not facilitated by an OMP) or the OMP, where it is facilitating the sale and so acting as deemed supplier for VAT purposes.
The invoice can be in paper or digital form, but the option to issue a simplified or modified invoice will not apply. Read more information
record keeping.
In addition to risk-based checks at the border, HMRC will, as it does now, carry out extensive risk-based compliance activity away from the border using various data sources to identify and tackle non-compliance.
Who should register for VAT
OMPs must register for UK VAT in order to account for VAT on their deemed supplies, with effect from 1 January 2021.
You will also need to register if you sell goods directly (without using an OMP to facilitate your sales) to UK consumers and the goods are outside the UK at the point of sale. From 1 January 2021 the distance selling threshold for sales from EU member states will no longer apply. There is no VAT registration threshold for businesses established outside the UK so you will be required to register for VAT on any value of sales where you become liable for VAT under these new measures.
You should
register for UK VAT if you haven’t already.
If you are already registered for UK VAT you do not need to register again. There is no separate form of registration for these measures – just the standard UK VAT registration for non-established taxable persons.
If you are a business established in the EU and making sales to UK consumers that were covered by the distance selling rules prior to 1 January 2021 then you may already be registered for UK VAT and can continue to use your VAT registration to account for VAT under these new arrangements for the VAT treatment of overseas goods.
What an online marketplace (OMP) is
We use the term OMP to describe any electronic interface (website or mobile application) such as a marketplace, platform, portal or similar that facilitates the sale of goods to customers. As well as facilitating supplies, operators of OMPs may also sell their own goods on the OMP, but where they do so they are treated for VAT purposes as a direct seller rather than an OMP.
HMRC’s definition of an online marketplace is a business using a website or mobile phone app (such as a marketplace, platform or portal) to handle the sale of goods to customers which meets all of the following conditions:
- in any way sets the terms and conditions on how goods are supplied to the customer
- is involved in any way in authorising or facilitating customers’ payments
- is involved in the ordering or delivery of the goods
A business which only provides one of the following will also not be regarded as an OMP:
a) the processing of payments in relation to the supply of goods
b) the listing or advertising of goods
c) the redirecting or transferring of customers to other electronic interfaces where goods are offered for sale, without any further intervention in the supply
What a UK customer is
Whether the sale is to a ‘UK customer’ will be determined by whether the final customer’s delivery address for the goods is in the UK, irrespective of the customer’s billing address.
Goodwill clause
OMPs will need to be vigilant in ensuring that they get accurate information, as above, to apply the correct VAT treatment. This means they will have to undertake reasonable and proportionate due diligence and consider all the information available to them in determining the correct VAT treatment.
OMPs will not be held liable for any VAT underdeclared where they can demonstrate that they have taken all reasonable steps within their power to ensure that the correct VAT is charged.
Record keeping
OMPs and direct sellers will be required to keep electronic records of their sales for a period of 6 years and to provide records electronically to HMRC on request.
For OMPs this includes both sales they make themselves (directly to consumers) and sales by third party sellers that they help as an OMP, which for the purposes of these new measures will be deemed sales by the OMP.
