Import One Stop Shop (IOSS)
Import One Stop Shop (IOSS)
Items imported into the EU with a value of €22 or less are no longer exempt from VAT. This means that all goods sent directly from GB to consumers in the EU via online marketplaces or sales which are made directly will be subject to the local rate of VAT in the receiving customers country. We have a number of options available to help you manage these changes – depending on the size and nature of your business.
The EU's Import One Stop Shop (IOSS) can help you begin to or continue trading from GB into the EU. You can either register via an intermediary and file your own tax returns or we can assist you with this process.
If you register yourself all that you will need to do is input your IOSS number into the correct field where requested on the Royal Mail shipping platform that you use. If you need help calculating tax then Hurricane’s Aura service can do that in your checkout.
If you don't want to register yourself, there are a number of options widely available to you such as Taxamo Assure. Perfect if you simply want to concentrate on selling, they will often do the heavy lifting for you. See below for further details.
If you are dispatching goods from Northern Ireland to the EU, IOSS cannot be used to declare and pay VAT on your EU sales. Instead, you can make use of the One Stop Shop (‘OSS’) which is another EU VAT scheme that allows you to declare and pay VAT on all sales into the EU by submitting a single quarterly EU VAT return. Alternatively, you can register for and pay VAT in each member state you are selling goods to. If your overall annual sales from NI to the EU doesn’t exceed £8,818 (€10,000), you can continue to charge UK VAT to your EU customers. HMRC’s OSS guidance can be found here. The HMRC OSS registration portal can be found here.
Whichever IOSS solution you choose, Royal Mail can safely take your items and ensure that they get delivered across the EU without delay. Just provide your IOSS number and full customs data in the pre-advice you send us.
Should you wish to explore our Duty Paid options for exporting to Europe please click here.
What happens if I don’t act?
Your item will be handled as ‘Delivered Duties Unpaid’ (DDU). The recipient may have to pay import VAT (and customs duties if payable) and a handling fee in the receiving country. These charges will depend on the country that you are sending to, the value of the goods and the nature of the item (e.g. commercial goods or gift).
Where this has not been communicated to the customer during the sales process, and they are not expecting additional VAT and duties (or the handling fee) this may lead to delays or returns impacting on the overall customer experience.
If you are a business who sells to customers in the EU, you have several options to consider.
1. Selling through a marketplace
If you sell through a marketplace, they are already likely to have registered for IOSS. If so, you just need to ensure that you assign their IOSS number along with all the normal customs data in the pre-advice to us for the items sold through that marketplace.
Marketplace sellers who sell via Amazon, eBay, Etsy and NotOnTheHighStreet can continue to visit their local Post Office in the normal way. Those customers should declare which of these marketplaces their items were sold on when presenting them at the Post Office counter and the Post Office branch will capture this information. The correct marketplace IOSS number will then be allocated to your item by Royal Mail. If you are selling goods on other marketplace places you can use the Royal Mail Click & Drop service – where you will find instructions how to do this.
2. The Import One Stop Shop (IOSS)
You can register yourself via an intermediary and file your own EU VAT returns. If you prefer to concentrate on selling, you may want to consider an ‘assisted’ IOSS solution. Whichever approach you choose they allow you to calculate and collect VAT from your customer at the checkout and pay it directly to the EU. You just need to assign the right IOSS registration number to each item in the pre-advice (along with all the normal customs data) you give to us. If you don’t use Taxamo Assure and you need help calculating tax then Hurricane’s Aura service can also do that in your checkout. See below for further details.
By using IOSS, the vast majority of our delivery partners will not charge import VAT or a handling fee. This will help to avoid unexpected charges and delivery delays to the end recipient, improving the overall customer experience.
Assisted IOSS options
A simple 'pay-as-you-go' option where Taxamo acts as the ’electronic interface’ for you - allowing you to use its IOSS number to send parcels to consumers located in the EU. For sales where Taxamo is the electronic interface, there is no need for you to register for IOSS and file tax returns. This type of third party solution will allow you to comply with the new rules and ensure a smooth delivery experience for your customers.
Calculate the landed cost of your goods with Aura from Hurricane
If you register yourself for IOSS, you will need to calculate the landed costs of your goods. You can do this by using Aura from Hurricane. This service calculates all import Duty and Tax chargeable at the checkout. It also provides a Prohibited & Restricted Goods check, Denied Parties check & HS code look-up all in one API call.
If you would like to progress, please ask your Account Manager for access to the Landed Cost API (Aura) and they can raise a request with the Royal Mail API team for you.
So, what’s best for you? Options for sending from GB to the EU
Here are the different options at a glance to help you to decide what suits your business best.
|Options||Delivered Duties Unpaid (DDU)||IOSS - Sender Self-Registration||IOSS - Selling via a Marketplace||Assisted IOSS Solutions|
|UK sellers do not ask their customer for tax and duty. EU recipient is contacted in country of delivery and pays VAT owed before receiving the item||UK seller registers for VAT themselves via an intermediary, collects VAT and completes monthly tax returns||UK seller sells through an IOSS registered marketplace. The marketplace takes on the responsibility for collecting and paying VAT on B2C items with a value of €150* or below||UK seller uses trusted partners to a) provide support in registering and completing tax returns, or b) completely take care of EU VAT compliance instead of the seller, to simplify the process for collecting and paying VAT on B2C items with value up to €150*|
|Process involved||No action needed||Integrate a landed cost calculator (e.g. AURA from Hurricane)
Register for IOSS, via an EU intermediary, in one EU country to get an IOSS number
Provide IOSS number and customs data to RM in pre-advice
Account for VAT and complete monthly returns
|Register to sell with a marketplace
Place your goods on their website
They take care of VAT obligations (for B2C items up to €150*)
|Pay a fee to a third party to:
Support you in registering and filing tax returns for IOSS for a fee/subscription OR...
Take care of VAT at point of sale and pay VAT obligations under the partner’s IOSS number
|Why do this?||Simple option that requires no change
Can help you to keep costs appear low at checkout
|Saves on third party costs and often uses in-house tax expertise or resources||Marketplace takes care of VAT (for B2C items up to €150*) and IOSS number
Can simplify logistics
Offers broader market access
|Simplifies the process of filing and registering for VAT/IOSS and ensures calculations are correct
Option for a ‘pay as you go’ solution to be ‘hands free’ of VAT
Peace of mind if wanting to register yourself for IOSS and file for VAT
|Challenges?||Unexpected costs for your EU recipient (VAT and handling fee)
Customers can refuse to pay and item is returned
Interrupted customer experience
|Specialist understanding and time is required to manage returns (handling enquiries with tax authorities, choosing where to register and file, deciding on an intermediary)
Risk of issues when completing returns
|Reliance on the marketplace
Fees are taken from each sale (10% plus)
Reduced control and brand recognition
Doesn’t cover items over €150* or items of any value sold to businesses
|Requirement to complete VAT returns yourself (the returns would not be done for you but checked), unless ‘pay-as-you-go’ solution is used
Higher cost of business if choosing a ‘pay as you go’ per parcel option (but no requirement for tax return filing)
*Please note: When sending to certain EU Countries, typically those who have chosen not to adopt the Euro they may apply a different, local calculation that they will use for low value clearance including IOSS. It is important you check this prior to sending.
Frequently asked questions about IOSS
The chances are that you will have questions about the changes taking place in relation to EU VAT on 1 July and the options open to you. Take a look at the Frequently asked Questions and their answers to help you find the right solution for you and your business.
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