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Calculate sales VAT for goods less than £135

Overview

Imported goods consignments (i.e. including multiple goods in single package) worth less than £135 and passing through UK customs borders are subject to sales VAT instead of import VAT charges.

Environment

AvaTax

VAT Background

This VAT treatment should be charged to the UK consumer by the UK or non-UK seller in the checkout at the point-of-sale. The seller must then report and pay the collected VAT through a regular UK VAT return. A simplified customs declaration will still be required. Goods above this value are be subject to VAT and customs in the old way.

If an online marketplace facilitates an import sale below £135, the marketplace is responsible for charging and reporting VAT. For any marketplace-facilitated sale of any value made by non-UK sellers where the goods were already in the UK, the marketplace is also responsible for the VAT obligations.

Learn more about these legal changes to VAT treatments in the UK

AvaTax settings

AvaTax can calculate this VAT rate if you're selling physical goods into the EU/UK, the destination country is not set as the importer of record in your AvaTax company profile settings, and your account has enhanced VAT calculations. To adjust your importer of record setting for each country, go to Settings > Where You Collect settings > VAT/GST Tab > (Country Name) Details and change the Importer of Record checkbox accordingly. Contact your Avalara Account Manager to request enhanced VAT calculations if it's not already enabled for your account. 

Note 1: Whether or not your the importer of record depends on VAT laws in the relevant countries, as well as various customs thresholds and shipping factors. Always consult a VAT professional before making changes to your AvaTax company profile. If you need help registering or filing VAT, contact Avalara to learn more about VAT services.

Note 2: The importer of record checkbox is a country-specific setting that is shared between VAT/GST and Customs Duty tax types. If you use AvaTax to calculate customs duties and VAT, changing this setting for one tax type will change that setting for the other. If your use both tax types, contact your Avalara Account Manager before making changes. 

 

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