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VAT distance selling rules come into force

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Finance Act 2021 Sch 18 introduced two new special accounting schemes – the one-stop shop (OSS) and import one-stop shop (IOSS) so far as relevant to the UK’s obligations under the Ireland/Northern Ireland Protocol. The new schemes are set out in new VATA 1994 Schs 9ZD and 9ZE. Both schemes are EU-wide schemes which come into effect on 1 July 2021.

The Finance Act 2021, s 95 and Sch 18 (Distance Selling: Northern Ireland) (Appointed Day No 1 and Transitory Provision) Regulations, SI 2021 /770, bring into force the bulk of the provisions in FA 2021 Sch 18 from 1 July 2021. These are the first appointed day regulations to be made under FA 2021 s 95.

Much of the new Schedule 9ZE which is inserted into VATA 1994 is excepted from the general commencement provisions. That schedule introduces the IOSS for persons making supplies of goods to Northern Ireland or into the EU from non-EU countries, although certain transitory provisions will apply until 31 December 2021 modifying references to the IOSS. (There appears to be a drafting error in reg 7 which disapplies modifications made by ‘regulations 8 and 9’, although the relevant modifications are actually included in regs 5 and 6.)

The regulations also give HMRC the power to make further transitional provisions (in a published notice) relating to interim procedures and conditions for establishing whether a supply qualifies for relief from import VAT under VATA 1994 Sch 9ZE para 37. Any such notice will cease to have effect on 1 April 2022.

The regulations come into force on 1 July 2021.

Issue: 1538
Categories: News