The new post-Brexit VAT rules may not be as damaging as expected for EU BrickLink sellers.
Earlier this month, Brick Fanatics reported that changing VAT rules would make life more difficult for BrickLink sellers shipping from the EU to the UK. That’s still true, but the extent of the damage may be less severe than previously believed.
Under the new system, all overseas sellers (including those in the EU) will become responsible for handling VAT. That process involves registering with HMRC and paying the sales tax directly to the UK government. However, Brick Fanatics reader Alex Smeed emailed in to let us know that this rule will only kick in on transactions above £135.
If you’re a UK LEGO fan buying sets, bricks or minifigures worth less than £135 from an EU BrickLink seller, the onus to collect and pay VAT to the UK government won’t be on the store owner. Instead, according to the government’s official advice, responsibility will fall on the online marketplace facilitating the sale. In this case, that means BrickLink.
Of course, that doesn’t necessarily mean BrickLink won’t simply change its own rules, and make HMRC registration a requirement for stores selling to the UK. And for transactions over £135, EU sellers will become responsible for handling VAT anyway – so unless they limit the volume they’re willing to sell to UK buyers, they’ll still have to register with HMRC.
As we noted in our original story, the direct consequence of the extra effort and costs may be that EU sellers drive up prices, or stop shipping to the UK altogether. Depending on how BrickLink – which is now owned by the LEGO Group, remember – processes the changes, the best we can really expect is that EU sellers cap UK orders at £135.
That’s obviously more agreeable than the alternative, particularly for buyers who generally make smaller orders. But it’s certainly not ideal, and is dependent on a lot of variables. Plus, the other consequences of the new VAT rules will still be in effect from January 1, when the UK fully leaves the EU.
The first of those is that British sellers will also be liable for European VAT on their exports to EU countries. While UK fans who own BrickLink stores may face reduced competition on home soil, they’ll also face difficulties in markets beyond British borders.
The second is that 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.