With major changes to the way we ship to the EU coming into effect this week, the Post Office is alerting its customers that a new post-Brexit change concerning VAT will affect goods being sent from Great Britain to the EU from Thursday the 1st of July. This will especially impact sellers on marketplace where the VAT as already been collected as they won’t need to know the relevant marketplace IOSS when shipping but will need to declare which marketplace the goods were sold on for each individual parcel.
What’s Changing on the 1st of July?
Items sold to EU destinations from Great Britain with a value of €22 or less will no longer be exempt from VAT. They will be subject to the local rate of VAT and charges of the destination country.
The EU have set up a new scheme called the Import One Stop Shop (IOSS) that allows businesses that register on the scheme to apply VAT and customs charges at the point an item is sold. For Post office customers, the change predominantly affects marketplace sellers who sell via marketplaces registered on the scheme. Post Office has put in place new checks to ensure the correct information will be collected for the IOSS scheme, so marketplace sellers can continue to buy their postage in Post Office branches with confidence.
“Whilst these changes don’t impact customers sending gifts to the EU, we’re concerned that thousands of marketplace sellers, particularly smaller ones could get a shock on 1 July when having to deal with these new VAT arrangements. We have put new checks in place to ensure marketplace sellers can continue to come to their local Post Office to send their goods with confidence. Crucially they can also receive advice and specialist knowledge from their Postmaster if they need it.”
– Mark Siviter, Mails Product Portfolio Director, Post Office
Marketplace IOSS the Post Office is ready to support
Amazon, eBay, Etsy and NotOnTheHighStreet are ready
Marketplace sellers that use Amazon, eBay, Etsy and NotOnTheHighStreet can continue to visit their local Post Office and the Postmaster or their staff will capture the necessary information now required following this post Brexit change to the VAT rules. Our understanding is that Royal Mail, Parcelforce and the Post Office have these four marketplace IOSS numbers and will apply them to the shipments to indicate that the VAT has already been collected.
We are recommending that if you post parcels at a Post Office that you make sure you segment them so that you can declare which marketplace they were sold at when your present them at the Post Office counter. Our understanding is that you simply need to know which parcel was sold on which marketplace, so write on the parcels or at least have them in separate bags to make your life easy.
Other marketplaces need to liaise with Royal Mail
If you’re wondering how to handle parcels you’re shipping from any other marketplace at the Post Office, the answer is that the marketplace probably needs to be urgently speaking to Royal Mail to enable easy shipments from your local Post Office. If marketplaces you sell on aren’t ready then make sure they’re aware that your EU customers will probably be charged VAT on the doorstep even though the marketplace has already collected the VAT at the point of sale!
When will marketplace IOSS be applicable?
We’ve also asked the question concerning items sold in the last few days of June, before the marketplace IOSS came into effect and before VAT was collected by the marketplace. If you post on the 30th of June, then we understand the EU won’t attempt to collect VAT so long as the postage label shows this date. If you post on the 1st of July or after then tell the Post Office which marketplace the item was sold on.
Finally, what happens for items valued at over €150 where you are responsible for collecting the VAT regardless whether the sale was on your own website or a marketplace. In this case, you are probably a professional seller, have your own IOSS number and will be collecting VAT and have shipping integrations with a Royal Mail or Parcelforce collection rather than posting at the Post Office. However if you use the Post Office then we understand that VAT will be collected upon delivery.
As a reminder, you will also need customs forms when you ship at the Post Office,
Gifts and Northern Ireland
Customers sending gifts to EU destinations are not affected by these changes. Gifts under €45 remain exempt of VAT or charges.
These new changes do not apply to anyone visiting a Post Office in Northern Ireland and posting gifts or sending items sold to EU destinations from Northern Ireland.