HMRC Ensures Import VAT is collected for the EU whilst failing to collect it in the UK

Another entry in the annals of 'you couldn't make it up' sees HMRC introduce

an EU Import One Stop Shop portal for Northern Ireland that ensures compliance with EU rules for collecting VAT on mail order imports. Whilst far from perfect the EU's IOSS does at least ensure that mail order companies selling into the EU pre-pay the VAT. If IOSS is ignored then packages are subject to customs assessment when they enter the EU, potentially resulting in an Import VAT bill for the recipient and an unhappy customer for the seller. All well and good you might think however, goods coming the other way into the UK are subject to no VAT assessment at all, if they are below £135 in value. This is because HMRC assumes that the seller of the goods has voluntarily registered for VAT or that the goods have been sold on an Online Marketplace that collects the VAT for HMRC. In other words there is no pre-payment of VAT arrangement and no assessment for Import VAT at the border for mail order goods entering the UK leaving a gaping opportunity for abuse. This is bad for UK businesses having to compete with these imports, bad for The Treasury and completely ridiculous given that HMRC is now enforcing a far better arrangement for the EU.