As of 1 Jan 2021, “online marketplaces” are required to collect Value Added Tax (VAT) for goods sold to UK customers. As far as I can tell, Tindie meets the definition of “online marketplace”.
Is Tindie going to register for collecting UK VAT? Or should we stop selling to the UK?
We haven’t registered yet, but we are working with our tax advisor to ensure that we meet local requirements.
Please note that on Jan 1st, 2021, the UK will be removed from the EU group in our shipping rates and moved into non-EU Europe group. If you wish to have a specific UK rate, you will need to set one up before then.
Hi Jamsine,
Happy new year!
Has there been any progress with this?
Thanks,
Seon - Unexpected Maker
Unfortunately, we are still sorting this out.
In the meantime, I have put a notice on my store that orders to the UK must either be a minimum of £135 or include recipient’s VAT number.
Up until now, the local post service in the UK requires the receiver to come in and pay VAT, as well as an 8 pound “VAT collection fee” before they release the goods. If VAT is paid beforehand, at least our customers won’t have to pay the collection fee.
OK, it’s been a month of “sorting it out”. I’ve stop selling to the UK because of this. Please, Please, Please figure it out. I am losing sales.
Here’s what I’ve been telling my UK customers:
Due to the UK’s changes to VAT treatment of overseas goods effective 1 Jan 2021 (https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021) Tindie, as an Online Marketplace (OMP), is required to collect VAT on sales under £135. Tindie currently does not have a mechanism to do this. Until this happens, sales to the UK must exceed £135 (the equivalent of 10 LCDs). Therefore, I cannot directly sell to buyers at UK addresses unless they purchase 10 LCDs or more.
However, you can use a package forwarding service such as borderlinx.com. They do handle VAT correctly, and come highly recommended. You will likely end up paying more in shipping charges, though. And, there is always the risk that your package will get lost.
The procedure seems to be:
- Sign up for a borderlinx account.
- Find your account’s US postal address.
- Use that address when you buy from the US.
- The shipment goes to borderlinx’s US warehouse, where it gets bundled with other shipments.
- borderlinx ships the bundle via DHL to the UK to their UK warehouse.
- The shipment goes out locally.
You can see that with two extra stops at warehouses, there’s a higher chance of a package going astray. Nevertheless, I’ve heard that people have good experiences using package forwarders.
Even if you do get sales to the UK you will lose them in the end.
I have several packages stuck at the border since the first week of January. It is a complete mess and people start demanding refunds.
I stopped shipping anything to the UK. You only get angry customers and lose money at the moment.
How do I temporarily disallow purchases from the UK on my store?
You can probably change your shipping rates to exclude the UK. And put a note on your items saying that you can’t ship to the UK, and why. I recommend you use the note I used above (minus the number of LCDs they need to purchase)
Has Tindie provided non-UK sellers with any guidance on how to handle the UK VAT policy, or are they just ignoring it? I can’t find anything in their FAQs.
FWIW: I shipped my first package to the UK this year without any issue. Sent late February, delivered this week. Shipped from the US with USPS First Class Package International.
As with all international orders I included 3 copies of a commercial invoice (detailed with HS Code etc.) in a pouch on the outside of the package. The customer probably received a notification from their post office and had to pay VAT plus fees added on top ($10-25 seem to be common).
PS: I sell electronics, value ~$100
I have to say that Tindie not doing anything on this issue is pretty aggravating. Compounding it is the fact that they are saying they need to deal with US state sales taxes first but have no timeline for that, either.
There are several levels of solution here.
I’m in the USA. I just bumped into this today, either because it was my first sale to the UK this year, or because I got un update to my Endicia software. The Endicia software pointed me at a FAQ https://endicia.custhelp.com/app/answers/detail/a_id/7318 which, amongst other things, says
" Do Sellers on eBay, Amazon or another Online Marketplace have to Collect VAT?
Very simply, yes. Online marketplaces (OMP) such as eBay, Amazon, Etsy and others will be responsible for collecting the VAT from the buyer when the sale occurs on their website as long as the price is £135 or less. For sales that are over £135, the OMP will not collect the VAT and existing import rules will go into effect (seller pays at port of entry)."
Which seems backwards to me i.e. all the little guys have to do more paperwork, but big sellers don’t. However it removes the penny-ha’penny charges and busywork for UK customs, so it makes sense in those terms.
I already rely on Endicia to automatically print out the required copies for each country, and they seem to be on the ball.
So for the time being I’m going to continue the same policy as I do for all countries - keep shipping to them till something breaks. If it breaks, cut them off and don’t ship there anymore. However the UK is maybe 20% of my sales, so maybe I give them a defined shipping rate (more markup than other places due to the hassle) and a note that I’ll be sending the customer an invoice for 20% to cover the VAT with an explanation that this is because the idiots in Westminster that they elected are doing this to them, not me, and they should write to their MP, and no other country in the world does this. In the meantime they have 7 days to pay up or I cancel their order and refund.
I made a new rule for this, and it seems to have served ok so far: Orders from the UK must now either be over £135 (because that was the threshold where the rules changed) or include the recipient’s VAT number.
