In 2021 the EU rolled out a number of changes to its VAT and import systems, some of which are blanket rulings regarding VAT charges and others are optional import schemes designed specifically to level the playing field in the ever-growing distance sales / eCommerce market.
The VAT changes saw the end of the 22 EUR tax exemption on goods imported to the EU and apply universally to any business selling to EU buyers. All goods imported into the bloc will now be subject to the VAT of their destination country (as VAT still varies between countries in the union). The aim of this change was to reduce fraudulent declaration of goods, as many importers were claiming that the value of products being sent was under the threshold in order to avoid paying VAT. This meant not only was the EU losing out when it came to collecting tax, but it also led to goods being seized or customers being charged with the recalculated VAT owed.
To help facilitate the change in the VAT system, the Import One-Stop-Shop (IOSS) scheme was introduced to give some advantages to distance sellers of low-value (150 EUR or less) goods which will particularly be affected by the scheme. The following business has the ability to sign up for IOSS:
Both of the aforementioned businesses have the ability to sign up to the import scheme, however, it is only businesses that are established within the EU which can sign up to the scheme directly. While non-EU established businesses must appoint an EU-based IOSS intermediary to access the scheme, both have the choice of appointing an intermediary, who will help facilitate the payment of VAT and ensure their EU compliance.
When the UK left the EU after the Brexit vote in 2020, they lost the privilege to be able to directly apply for the import scheme and therefore UK businesses who want to take advantage of the scheme must appoint an IOSS intermediary who is based in the bloc. Consequently, An IOSS UK registration can only happen through this intermediary, who will apply for IOSS registration on the company's behalf and also pay owed VAT from the total sales made by the company as their fiscal representative in the EU.
Here at Ship24, we pride ourselves on our international shipping expertise which comes from both our experienced international team and logistics, tracking, and VAT services which we already provide to hundreds of businesses worldwide. Our IOSS solutions are not only fully supported by our dedicated team, but we offer one of the fastest IOSS registration processes, with companies receiving and using their IOSS number within as little as 3 working days. We are also compatible with a number of different platforms, such as with our Spotify plug-in which automatically calculates the VAT owed on sales so you can make sure you are fully EU compliant under the IOSS scheme. Talk to one of our team today or check out of IOSS solutions page for more information and start enjoying the advantages UK IOSS registration will mean for your business or marketplace.
Related:IOSS Marketplace IOSS number IOSS HMRC
Some of the advantages which businesses could see through UK IOSS registration include:
Related:IOSS UK IOSS Ireland IOSS USPS
Once you have completed your UK IOSS registration, the relevant EU tax authorities will
issue your unique IOSS VAT number. Each UK IOSS registration will be handled separately meaning businesses will have their own number and cannot use other IOSS numbers. If your business uses a marketplace that has an IOSS number, then you may use the IOSS number of the marketplace. However, you need to make contact with the marketplace to ensure that you are displaying the correct VAT at the point of sale, as under the IOSS scheme this is where all tax charges must be displayed, declared and collected, before being paid to the EU.
IOSS fiscal intermediaries will also receive a separate IOSS VAT identification number for each business that they represent. Please note, the IOSS VAT identification number must only be used to declare distance sales of goods imported under the scheme and not for any other reason.
Related:IOSS Royal Mail IOSS Australia Post IOSS Fedex
The IOSS VAT number which will be provided to the business will also be given to the customs authorities across the EU in order for them to be able to identify orders under your IOSS number and release the goods for free upon import.
However, sellers still need to make sure that their IOSS number is securely transmitted to the customs declarant (the company/courier responsible for the delivery of the goods).
Other than to the customs declarant, a UK IOSS registration number should not be shared with any other third party, especially those beyond the supply chain which will not need this information or not be involved in its delivery of the facilitation of the sale.
Related:IOSS DHL IOSS UPS IOSS Customs
An IOSS identification number will consist of 12 different alphanumeric characters. If you want to get your unique IOSS number and secure your UK IOSS registration, then Ship24 would love to hear from you. You can chat with our dedicated team or view our comprehensive IOSS pages, including on IOSS UK, IOSS EU VAT rules, and for specific couriers and marketplaces like Royal Mail and Shopify.