VAT should not be charged on sales shipped to Europe from a non-EU country. As the UK is now a non-EU country. Therefore, both EU and non-EU businesses should not charge VAT on their sales if they ship from the UK.
Stores Using Ochres Payment Gateways
If Ochre is the merchant of record for your store it is our responsibility to manage taxes on sales. Our systems are set to update automatically following rule changes.
Ochre is VAT registered or has pending registrations in a number of EU countries and is increasing this to ensure that a significant portion of our market is covered. We have a relationship in place with a Tax specialist who can assist with applying for further registrations if and when we need to early in 2021.
Stores Using the Clients Payment Gateways.
If you are the merchant of record for your store it is your responsiblity to handle taxes on sales. Please inform us of any existing EU tax registrations and changes on going.
Due to the evolving timelines we have seen with Brexit and the on-going trade negotiations, we cannot switch cleanly to new rates on January 1st. We will make adjustments within the first week of the new year in time for January's accounting.
Notes on Distance selling regulations
A key change when the UK leaves the European Union is that it will no longer be part of the EU Distance Selling Regulations. These have allowed retailers who sell less than a set threshold to pay VAT to their local tax authority rather than reporting locally in their customer’s country.
This change implies that UK businesses will need to be VAT registered in all EU countries if they are shipping from within the EU.
Import VAT may be charged on some packages entering the EU. This will be charged by the shipping company directly to the customers and may mean additional administrative fees for the customer. If, how and when these charges will be levied is something we are seeking further advice on.
We are awaiting information from our shipping partners on what DDP and DTP services are available to allow the sender to cover these costs for the recipient.