On Christmas Eve 2020, the European Union (EU) and the United Kingdom (UK) managed to avert a tough Brexit after tough negotiations.
This would have made (online) trade and exchange at all levels between the EU and GB much more complex due to comprehensive border controls, customs duties, ... and would thus have led to considerable economic losses on both sides.
One of the three pillars of the EU-UK agreement, which still has to be finally approved by the UK Parliament on 30.12.2020, will be a free trade agreement.
Free Trade Agreement
These agreements include (see press release of 24.12.2020) a continued free transfer of goods.
This means that, for the time being, no tariffs and no quotas will apply to many goods in online trade.
Note: However, the customs devil is also in the detail here. The agreement is not a general exemption from customs duties. This will only affect goods that meet the so-called rules of origin. If you are not sure about your products, contact a customs expert in any case.
But that doesn't mean that nothing fundamentally changes.
No tariffs but new Value Added Tax regime
From 1 January 2021, a completely new Value Added Tax regime will apply to deliveries to and in the UK. However, this was already clear before the final negotiations on 24.12.2020.
In summary, this means that almost every supply to and within the UK will be subject to UK Value Added Tax from 2021 - regardless of previous exemption limits and thresholds.
You can find a comprehensive description of the new regulations in our Brexit whitepaper, which you can download free of charge here.
Taxdoo is the platform for automated and secure compliance processes
... and forms for the leading online merchants in Europe besides the handling of the ongoing Value Added Tax-Compliance in the EU, GB and CH offers numerous additional services that make life much easier for traders and their tax advisors.
If you want to know more about how you can efficiently and securely map all this via a platform, then book your individual and free initial consultation with the compliance experts at Taxdoo via this link!
You are also welcome to register for our regular demo webinar in which we will introduce Taxdoo and our compliance services and answer your questions personally.