Etsy sellers ban UK buyers over VAT Brexit confusion

Etsy sellers within the European Union are the latest merchants to stop shipping to UK customers over confusion about whether VAT should be levied on sales.

At the turn of the year, after Brexit, various companies selling online from EU countries started to end sales to UK customers - from beer making kit companies to bicycle spare parts firms - because of uncertain and complex regulations stating they had to register for VAT with the UK's HMRC and collect tax on behalf of the UK government.

Not only did they have to collect tax according to these regulations - that came into force on January - they also had to pay the UK tax office a fee for the privilege of doing so.

A number simply put notices on their websites notifying existing and new customers they were now unable to order items from their websites.

The Etsy marketplace has now been accused of being slow to change its systems to account for the new VAT rules, causing confusion among sellers in the EU.

Overseas retailers sending goods to the UK are expected to register for UK VAT and account for it to HMRC if the sale value is less than €150 (£135).

Supposedly, most Etsy sellers won’t need to register with HMRC as online marketplaces - including Etsy, Ebay and Amazon - are able to collect VAT on smaller items on behalf of the sellers.

Despite this though, EU sellers have complained that Etsy has shown no indication as to whether it was collecting VAT, leaving them in confusion over whether they should ship to the UK and whether they should pay the tax.

One seller told Business Insider: “Etsy was supposed to automatically implement VAT starting 1 January and I had an order come in on that day from the UK.

“However, when I printed the packing slip and invoice, it wasn’t reflected and my customer only paid for the item and shipping like usual. I read the forums and a lot of people said they didn’t get charged VAT either.”

Etsy now says it has fully updated its systems to account for the VAT changes, meaning both sellers and buyers should see the tax reflected in prices and shipping slips from now on.

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