In the news this week: a new tax bill could change how businesses deal with import VAT, while Amazon’s semi-annual inventory clean-up will be taking place in February.
Taxation (Cross-border Trade) Bill
The Taxation (Cross-border Trade) Bill, currently going through Parliament, is proposing to change the way that VAT is charged on goods imported from the EU into the UK. Currently, businesses can apply to defer payment of import VAT on some goods from the EU until they’ve been sold. The new bill will amend existing VAT and excise legislation - the EU concept of acquisition VAT (for business-to-business imports within the EU) will be abolished and VAT will be charged on all imports from outside the UK.
For UK retailers this change will mean that you have to pay import VAT for all goods received from the EU and then claim the VAT back where applicable, which could have serious implications for a business’s cash flow.
The Bill has had its second reading debate and has now been committed to a Public Bill Committee, which will be reviewing evidence from 23 January and will conclude by 1 February at the latest. Find out more about the Taxation (Cross-border Trade) Bill here.
Amazon FBA long term storage fees
Amazon’s next Fulfillment By Amazon warehouse inventory clean-up will be taking place 15, February. Twice a year on 15 February and 15 August, inventory in Amazon’s fulfilment centres is reviewed and items that have been there for between 6 - 12 months will incur a long-term storage fee of £441.25 per cubic metre. Any items that have been in Amazon’s warehouse for longer than 12 months will be charged £882.50 per cubic metre.
Find out more about Amazon’s storage fees here.