With the 1st of July rapidly approaching, we’re grateful to Royal Mail and Parcelforce for some insights around how to get IOSS-ready and the changing regulations for sellers sending within the EU which are about to come into force:
Major changes to EU Value Added Tax (VAT) will take effect from 1st July 2021, affecting businesses selling goods to consumers located within the EU. It is important that you are fully aware of, and ready to deal with, these changes by that date. If you haven’t registered for the EU’s Import One Stop Shop (IOSS) yet and you sell to recipients in the EU, you can do so before 1st July. Check out Royal Mail’s innovative ways to get IOSS-ready below.
From 1st July, the EU’s current VAT threshold is reduced to €0 which means that every item becomes liable to VAT, plus the handling fee charged by delivering posts to collect the VAT.
The EU’s Import One Stop Shop (IOSS) ensures recipients are not charged anything on delivery. It is available for items sold by businesses or on marketplaces to consumers valued up to and including €150.
From 1st July, you will be able to use Royal Mail’s Click and Drop® to ensure you submit your IOSS number when you buy your postage. This will help your customers avoid delays and unexpected additional charges. Note that items sent prior to 1st July may be subject to VAT being applied on arrival in the destination country.
You will also need to choose which IOSS solution best suits your business. Royal Mail has teamed up with Deloitte and Taxamo to provide tailored support according to your needs. If you haven’t already registered for IOSS yourself we offer two other options – which of these is most suitable will depend on your circumstances and how quickly you need to get IOSS-ready.
In accordance with HMRC guidance, IOSS cannot be used for items despatched from Northern Ireland to the EU. If selling less than €10,000 worth of goods a year from NI into the EU you can collect UK VAT and pay it in your UK tax return. If selling goods worth more than €10,000 you can register for the EU’s One Stop Shop (OSS) or register in each EU member state you are selling into.
This is a simple ‘pay-as-you-go’ option where Taxamo enables you to comply with the new rules and ensure a smooth shopping experience for your customers, without having to deal with complex requirements or submit VAT returns in the EU. This option can be activated very quickly with the minimum of fuss.
IOSS Registration and Filing Service, from Deloitte
Alternatively, you may choose to sign up for Deloitte’s IOSS Registration and Filing Service, which enables you to send parcels, with the VAT paid, to customers across the EU with your own IOSS number. This option is suitable for businesses sending higher volumes of parcels to consumers in the EU, who do not want to register and manage tax returns in-house. It does take a few weeks to register so you will need to start the process as soon as possible, or register for Taxamo in the short term.
Aura Landed Cost Calculator and Compliance Check, from Hurricane
When selling into the EU you may need a landed cost calculator to calculate how much VAT and Duty you need to collect at the point of sale. Royal Mail can provide its customers with Aura from Hurricane free of charge. As well as landed cost Aura also conducts compliance checks for you.
Find out more about Royal Mail’s IOSS solutions here.
Taxamo may be activated very quickly but requires technical expertise in house to integrate to their system using an API. Not sure I would call this “simple pay as you go”.
what are private individuals supposed to do when sending parcels to EU?
There remains a €45 threshold for gifts being sent into the EU. But if sending a gift valued over €45 or an item that has been privately sold then teh recipient will be asked to pay VAT and an handling fee prior to delivery
“Royal Mail’s innovative ways”? Come on. RM have no idea what’s going on and these are mostly 3rd party services. Nobody is ready for IOSS.
Speaking to friends over in Ireland they won’t order anything from the UK now. An Post are charging a handling fee ( profiteering ) and of course the price of the VAT will make UK sellers uncompetitive. Most them are ordering via the likes of Amazon DE.
Trying to work out how i receive as sellers requesting ioss number
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