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Royal Mail Import One Stop Shop Explained New rules by 1 July 2021
Helping you get ready for the EU’s VATe-commerce changes on 1 July 2021
Major changes with regards to the EU Value Added Tax (VAT) are coming to businesses selling goods to customers located in the EU. The changes will take effect on 1 July 2021. The EU’s Import One Stop Shop (IOSS) can help you start or continue trading from GB into the EU. We have three options to help you manage these changes - depending on the size and nature of your business.
As of 1 July 2021, items imported to the EU with a value of €22 or less will no longer be exempt from VAT. This meansthat all goods sent directly from GB to consumers in the EU, both via online marketplaces and sales made directly, will be subject to the local rate of VAT in your customer’s country.
Current Situation
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.
If you don’t have a solution in place by 1 July 2021, 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.
In response to the 1 July 2021 changes, if you are a business who sells to customers in the EU, you have several options to consider.
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.
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.
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.
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.
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.
