How to refund tax in 2021, sellers on the UK site should pay attention

The UK has implemented a new tax reform policy, and the UK's formal withdrawal from the EU has also had a certain impact on sellers in the UK market. Sellers should currently pay attention to the latest developments on how to refund taxes.

For different sellers, the cross-year declaration method will also be different. Independent site sellers can declare according to the original tax rate, and the declaration method remains unchanged. For OMP platform sellers, the value-added tax of sellers on Amazon, eBay and other platforms will be withheld and paid by the platform after 2021.

When sellers declare quarterly VAT, they need to divide it into two parts. The VAT for November and December 2020 can be calculated according to the original tax rate and paid to the tax bureau. Part of the tax since 2021 is the tax paid by the platform and does not need to be paid repeatedly.

There are three main ways for sellers on the UK site to get tax refunds: check, VAT account and refund to the seller's bank account. The tax bureau will send the seller a check to exchange at the bank, but it is not suitable for cross-border sellers. As for the second method, Amazon, eBay and other platforms will withhold and pay on behalf of the seller. The third method is that the tax bureau will refund according to the bank account provided by the seller, which may take a long time to process the refund.

In addition, sellers also need to understand common VAT issues on the UK site.

UK VAT declaration cycle and process:

The UK VAT declaration is mainly divided into two stages, namely the first stage declaration period and the subsequent declaration period. After the seller registers and receives the UK VAT tax number, there will be a declaration period description in the new HMRC, and the declaration can be made according to the statement. After the seller passes the first declaration stage, it will return to the normal UK VAT declaration cycle, which is generally a 3-month cycle.

VAT registration conditions:

The UK requires all cross-border e-commerce sellers or sellers with inventory in the UK to register for a VAT number. Which stores need to pay taxes depends on whether the store loan meets the requirements of the UK site.

A VAT tax number can be used on different e-commerce platforms, but different stores on the same platform cannot use the same tax number, otherwise the relevant accounts will be lost.

Stores that fail to pay VAT on time will be subject to varying degrees of punishment. If the UK Revenue and Customs HMRC finds that the seller deliberately delays or falsely reports VAT, the seller will be subject to varying degrees of punishment such as goods seizure, fines, and account restrictions.

Sellers need to determine which tax refund method is suitable for them based on their own circumstances, pay attention to platform-related information in a timely manner, and successfully obtain tax refunds.

U.K.

VAT