The 1st of July is rapidly approaching and still cross border sellers shipping into the EU don’t know how to transmit IOSS numbers into various carrier’s systems. For Royal Mail IOSS, thankfully a question was asked on the Click & Drop site which suggests Royal Mail don’t really have a solution so are looking to fudge the issue to keep parcels flowing to the EU.
If you don’t know what this is all about, the EU has created the Import One-Stop Shop (IOSS) with the intention of simplifying the declaration and payment of VAT on distance sales with an intrinsic value of less than €150. And marketplaces will collect VAT for sales below this value on your behalf, but you still need to get the carrier know the VAT has been paid in order for them to inform customs when the goods are imported into the EU. So a Royal Mail IOSS facility is needed just to collect the marketplace’s IOSS number.
“If you register yourself, all you need do is to input your IOSS number into the correct field, where requested, on the Royal Mail shipping platform you use.”
– Royal Mail
Royal Mail’s clear advice is to pop your IOSS into the correct field. Fantastic, what could be simpler?… Apart from the fact that no such field currently exists for Click & Drop!
Without a Royal Mail IOSS field for Click & Drop, they are currently suggesting that you store your IOSS in your trading name and use a different trading name for each marketplace. This is a fudge par excellence as it’s begging for errors to be made.
“IOSS should be stored on trading names for customers who are importing files from multiple marketplaces and a different trading names stored for the different marketplaces negating the need to enter the details on each import file.
For customers who have a direct integration into marketplaces like eBay, Amazon, NOTHS etc. and we pull the orders into Click & Drop from the channel, we will store the appropriate marketplace IOSS number and automatically apply the marketplace IOSS number on the orders for less than 150 Euros in the electronic data we pass when the end of day manifest or the label is purchased. Customers do not need to do anything different in these scenario’s the software will do the work on your behalf.”
– Royal Mail
This advice is ONLY for Royal Mail Click & Drop. If you use an alternative system for transmitting orders to Royal Mail you will need to speak to you label provider.
Additionally, try asking at your local Post Office how you indicate that a particular parcel was sold on eBay and another sold on Notonthehighstreet and where the IOSS number goes. In all likelihood you’ll be met with a blank stare and be told they have no ability to collect IOSS numbers. They may have a solution by the 1st of July, but currently staff in local branches don’t seem aware of what the procedure will be.
Passing the marketplace IOSS (or your own) to carriers will be critical to indicate that VAT has been paid. That’s why the Royal Mail IOSS fudge is better than nothing, but what is really needed is for Click & Drop to have an IOSS field and the Post Office also need to get a solution in place fast and inform their staff what’s going to happen.
10 Responses
Time for a holiday, I think.
Turn off all international platform sales and see what mess comes out of the back end!
The above is bad enough but the additional issue will be “duty” and how to prepay it for the likes of Amazon’s platform for 3rd party sellers.
It’ll sort itself in the end but it’s going to be a very bumpy ride for a while.
Much like the issue on ebay when ABN codes were introduced a few years ago, surely you can just hand-write the number on the parcel for now, until it’s fully integrated into the workflow?
As I understand it, IOSS codes have to be included electronically, if you manually include they will be ignored and the customer will be again charged vat on the doorstep
I’m confused by this IOSS business. I sell old comics on eBay and send maybe 10 parcels to the EU each month, but I post them at the Post Office counter (using Drop and Go). I’ve never had electronic contact with Royal Mail / never had an account with them (other than Drop and Go) so how am I supposed to get the IOSS details to Royal Mail and how will they link it to the parcel and know that the eBay duty has been paid?
Click & Drop does support IOSS already. You put your IOSS number in the European Union dropdown on your trading name (I have no idea why they didn’t call it the IOSS number tho). You don’t need to use a different trading name per channel. We use eBay and Amazon.
Royal Mail should have specially called it ‘IOSS’ – but it’s definitely there. It says so on their user guides.
https://help.parcel.royalmail.com/hc/en-gb/articles/360014645258-January-2021-changes-to-international-customs
I’m assuming that this will just be overwritten by the eBay or Amazon IOSS numbers when they come into play.
Hi Chris
Not so sure this is accurate
I am a Royal Mail customer and i have been advised different. Also i have noticed the DDP / IOSS webpage is being updated regularly and i am sure they will give clear guidance as normal prior to the go live on the 1st July
I am not VAT registered as my turnover is under the VAT threshold, how does this all impact me ?
@Shirley my understanding is that you will in effect become a net VAT contributor to the EU. If your items are BIN then add at least 22% onto the price. If you sell by auction on eBay then it’s all the more difficult. You may have to actually ramp prices by at least 25% to cover extra eBay final value fees as well. Obviously this is on items less than 150 Euro. Anything above that then you can collect the VAT yourself or export Duty unpaid. It’s all about getting the supply chain moving without interruption but small businesses and those on the UK VAT margin scheme will suffer.
@Shirley
If you are an eBay seller it doesn’t affect you financially, the buyer pays your price plus shipping plus their own rate of VAT.
This is why UK BUYERS on eBay are currently ‘suffering’ an additional 20% on worldwide imports on online market places (OMPs).
My understanding which may be wrong (cf @Jonty) is that the eBay FVFee is not affected by the VAT it is just charged on what you get paid.
@Shirley
Also see here: https://channelx.world/2021/06/eu-value-added-tax-advice-from-royal-mail-from-1st-july-2021.html, option 3 under Royal Mail advice.
My previous comment may not be appropriate.