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Did you know that Lego is one of the safest investments in the world? Believe it or not, Lego had an average yield of 11% from 1987 to 2015. This meant it out-performed gold and the majority of stocks and bonds. But before you run off to buy a millennium falcon set, you should probably know how Bricklink, the Lego marketplace, has been affected since Brexit. The distributor of the Danish plastic bricks have recently advised sellers and buyers about how it will treat VAT after Brexit now it has implemented its new VAT system.

Why Has There Been A Change?

Since Brexit, Online Market Places operating in the UK have increase tax collecting responsibilities. For B2C sales that are under £135 and are facilitated by a online market place, it is now the responsibility of the marketplace to collect and account for VAT. You can find out more about the changes to online market places after Brexit here.  

Bricklink, the platform famous for the sale of Lego, announced in January that it had registered as a market place and would be adjusting its services accordingly. Up until this point Bricklink had advised its customers to proceed as normal whilst they found a way to implement a system for their new responsibilities. However, the company has just announced that it will be rolling out its new VAT system from the 18th of May.

Essentially, Bricklink will behave as any other market place.  For any transactions made to UK addresses which equate to or less than £135, it will be the responsibility of Bricklink to collect the VAT. This will be reflected on the sale as a 20% increase on the sale. For UK-to-UK transactions, the buyer will just see a price that includes the VAT.

Buyers should bear in mind that this isn’t the case for sales to and from the UK from the EU. In this case, buyers will be shown a price that does not include the VAT. The VAT will then be added on at checkout separately. This added 20% will be paid directly to Bricklink, so at least sellers will not have to do anything with regards to VAT on those sales.

Bricklink will send a VAT invoice for all these transactions. Sellers should also be aware that the low consignment relief on purchases under £15 has also been rescinded since Brexit. That means all of your sales will be subject to VAT, regardless of their size.

For any sales between the UK and EU over the £135 limit the sellers will be responsible for collecting and reporting the VAT. They will also not be responsible for any B2B sales. Previously, sellers would’ve only had to register for VAT if their annual sales reached a certain figure. However, since Brexit, if you wish to continue making sales over £135 you will have to register for VAT in the country of the buyer, unless they are VAT registered themselves.

Conclusion

The new system implemented by Bricklink should certainly make things easier for users. The company has advised non-UK sellers who wish to continue selling into the UK to sign up for Bricklink’s on-site payment method and to use their refund feature. This should streamline the process. Here are some other guidance they have offered sellers.

If you are unsure about any of the points in this article, or anything to do with VAT when selling on a marketplace you should contact a tax expert – this is where we come in.

If you are a business who participates in cross border e-commerce through online market places, we would be more than happy to help you register for UK & EU VAT.

At J&P, helping you build your business is our passion. We understand that companies across the UK are at risk now more than ever. We are here to support you through Brexit and our long history of working with online market place sellers means we can offer you expert advice, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.