As of 1 July 2021, items imported to the EU with a value of €22 or less became no longer exempt from VAT. This means that all goods sent directly from GB to consumers in the EU, both via online marketplaces and sales made directly, are now subject to the local rate of VAT in your customer’s country.
Before 1 July 2021
Less than €22
- No VAT
- No customs clearance
More than €22, up to €150
- VAT
- Formal clearance
- Customs clearance fee
More than €150
- VAT
- Customs duties
- Formal clearance
- Customs clearance fee
As of 1 July 2021
NEW – Up to €150
- VAT
- Formal clearance
- Customs clearance fee
More than €150
- VAT
- Customs duties
- Formal clearance
- Customs clearance fee
How can I register for IOSS?
You can either register and file your own tax returns, or we can assist you to do so, via our new IOSS Registration and Filing Service - offered by Deloitte. If you register yourself, all you need to do is input your IOSS number into the correct field, where requested, on the Royal Mail shipping platform you use.
If you don’t want to register yourself, we also have Taxamo Assure - an innovative pay-as-you-go solution which is perfect if you simply want to concentrate on selling. See below for further details.
What happens if I don’t act?
If you don’t yet have a solution in place, your items will be delivered by Delivery Duties Unpaid (DDU). Subsequently, customers may have to pay import VAT and a handling fee in the receiving country before they can receive their parcel from our delivery partner. Whatever the case, this could lead to delays, returns and a poor delivery experience. Some customers might refuse delivery, rather than pay these charges.
Three options to consider
1. Selling through a marketplace
If you sell through a marketplace, they are likely to have registered for IOSS. If so, you just need to assign their IOSS number in the pre-advice to us for the items sold through the marketplace.
Marketplace sellers who sell via 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 for IOSS yourself or choose one of our ‘assisted’ IOSS solutions. You will then be able 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 you give to us.
3. Postal Delivery Duties Paid (PDDP)
PDDP is currently undergoing trial, due to be operational by July. If IOSS isn’t for you, or you are sending items above €150, this may be the answer. PDDP allows you to calculate and collect VAT from your customer at the checkout and to pay the EU tax authorities via Royal Mail.
So what’s best for you?
Whichever IOSS solution you choose, Royal Mail can despatch your items and ensure they get delivered across the EU without delay. Here are the different options at a glance to help you decide what best suits your business.
What is the EU’s Import One Stop Shop (IOSS)?
The EU’s Import One Stop Shop (IOSS) is a VAT registration scheme your business can use from 1 July 2021 to comply with the EU’s new VAT e-commerce rules on sales from GB to the EU. If you are despatching goods from Northern Ireland to EU you can use the One Stop Shop (OSS). Details are still being finalised but you will not need to provide a OSS registration number to us.
Once registered for IOSS in only one EU country, VAT can be collected at your online checkout and paid on all EU sales by submitting a single monthly EU VAT return. By using IOSS, our delivery partners will not charge import VAT or a handling fee.
You can find out more information about these changes, published by the European Commission, here and further guidance provided by the UK Government here.
What are Royal Mail’s IOSS solutions?
Register and file your own EU VAT returns
Register yourself for IOSS
Once registered all you need to do is input your IOSS number into the correct field, when requested, on the Royal Mail shipping platform you use. Alternatively, you could consider one of our ‘assisted’ options.
Or use one of our ‘assisted’ IOSS options
Taxamo Assure
A simple ‘pay-as-you-go’ option where Taxamo acts as the deemed reseller for you - allowing you to use its IOSS number to send parcels to consumers located in the EU. This solution will allow you to comply with the new rules and ensure a smooth shopping experience to your customers without having to deal with the complex requirements and submitting VAT returns in the EU.
For sales where Taxamo is the electronic intermediary, there is no need for you to register and file for IOSS. This solution will allow you to comply with the new rules and ensure a smooth delivery experience for your customers. Once you have integrated the technology into your checkout, it does everything for you including automatically calculating the landed cost for you - so you know what to charge at the checkout.
Find out more & register here
IOSS Registration and Filing Service offered by Deloitte
You can sign up for Deloitte’s IOSS Registration and Filing service which will enable you to send parcels, with the VAT paid, to customers across the EU with your own IOSS number. This option is recommended for businesses sending higher volumes of parcels to consumers in the EU, who do not wish to register and manage tax returns in house.
Find out more & register here
Calculate the landed cost of your goods with Aura from Hurricane
If you register yourself for IOSS, or register via Deloitte’s IOSS Registration and Filing service, 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 and HS code look-up all in one API call.
Find out more & register hereFrequently asked questions about IOSS
The chances are that you will have questions about these changes and the options open to you. Take a look at the FAQs and their answers to help you find the right solution for you and your business.
Frequently asked questions about IOSSAs an alternative to DDU and IOSS, we are developing a Postal Delivery Duties Paid (PDDP) service. This is due to be operational by July.
For items valued €150 or more, IOSS cannot be used so PDDP is a solution that has a lower handling fee than DDU. It can also be used for items below €150, if IOSS is not suitable for you.
This service will allow the UK merchant to calculate and collect from their customer at the checkout an additional amount, that will cover the cost of import VAT and customs duty alongside the PDDP handling fee.
If you need help calculating tax then Hurricane’s Aura service can do that at your checkout, also providing a Prohibited and Restricted Goods check, Denied Parties check and HS code look-up all in one API call.
We are also at an advanced stage of deployment planning for commercial solutions for PDDP and will be contacting existing customers in due course.
Find out more about IOSS and PDDP