New post-Brexit VAT rules may make selling LEGO to UK customers uneconomical for EU BrickLink stores.
When the UK fully leaves the European Union on January 1 – deal or no deal – new VAT rules will come into play. Under the current system, the buyer is responsible for paying the sales tax on goods over £15 from outside the EU. But from next year, all overseas sellers (including those in the EU) will become responsible for handling VAT.
To do so, they’ll have to register with HMRC, and pay the VAT directly to the UK government. That’s a lot of extra legwork to put in – and with higher costs to boot. The consequence is likely to be that EU sellers (and possibly others beyond) either drive up prices, or simply stop shipping to the UK altogether.
That’s likely going to be bad news for LEGO fans who regularly use BrickLink. The secondary marketplace is filled with LEGO sellers from all over the world, but finding the right mix of bricks usually means turning to stores outside of the British isles. At the moment, that’s not really an issue. But it will be from January 1.
To give one example: Star Trek icon William Shatner is planning to suspend sales to the UK from his online memorabilia store. The actor tweeted that simply filing the necessary forms would cost over £1,000 per year. Considering most BrickLink stores are minor, independently-owned ventures, it’s hard to imagine many of them tolerating those costs.
There’s one more change to bear in mind, too. British sellers will also be liable for European VAT on their exports to EU countries. So while UK fans who own BrickLink stores may face reduced competition on home soil, they’ll also face difficulties in markets beyond British borders.
And even if you only buy brand new LEGO sets, the changes could still impact your buying habits. Amazon has reportedly warned its UK sellers that they’ll need stock in both the UK and Europe to ship to those destinations, and it won’t be fulfilling orders from overseas warehouses (as it currently does). That could mean fewer options for buying your LEGO sets from Amazon – and as a result, fewer discounts.
According to the Telegraph, HMRC’s plans are meant to “ensure that goods from EU and non-EU countries are treated in the same way and that UK businesses are not disadvantaged.”