Import One Stop Shop for VAT

What is the Import One Stop Shop (IOSS)?

IOSS is designed to make it simple to sell low value items to customers in Northern Ireland and the EU.

• Implementation date: 1 July 2021

• Low value items are < £135 - 150 Euros (the VAT rules for higher value items are unchanged)

• Apply and charge VAT at the rate applicable in the customer's country.

• Make monthly returns and payments through the Import One Stop Shop (rather than registering and submitting returns in each member state).

Selling through an Online Marketplace

Do you sell through an online marketplace, such as:

• Amazon

• eBay

• Etsy

• Not on the high street?

If so, they are responsible for registering with the Import One Stop Shop, and you do not need to do so. They will account for the VAT, file and pay VAT returns with HMRC through IOSS. They will also deduct the EU and NI VAT on your sales from the money they pay you.

Selling through your own Website

If you sell through your own website, you must:

• Register with IOSS

• Apply and charge VAT at the rate applicable in the customer's country.

• Supply your IOSS number to your export agent, courier or Royal Mail.

• Make monthly VAT returns and payments to HMRC for the VAT on sales to customers in Northern Ireland and the EU.

What happens if I don't register?

If you send goods without an IOSS number, your customer may have to pay import VAT and a handling charge on receipt. This could cause delays, and lead to increased returns from customers in Northern Ireland and the EU.

Next steps?

Consider the costs v benefits of the scheme:

• How many 'low value' sales (under £135) do you make to Northern Ireland and the EU.

• What is your profit on these sales?

• Are they through an online marketplace or your own website?

• Consider the administrative costs of the IOSS, particularly if they are through your own website.

• Register with IOSS if required (or stop sales to NI and EU).

Here are details of the scheme from the EU and HMRC. Royal Mail have a useful overview on their website.

What happens while we wait for HMRC's IOSS portal to go live?

Unfortunately businesses have some difficult decisions to make:

• register with IOSS with the tax authorities in an EU member state (i.e. not through HMRC) - this brings additional challenges including the language barrier

• switch NI and EU sales from own website to an online marketplace

• suspend NI and EU sales on your own website

• notify NI and EU customers on your website that they may be asked to pay VAT and fees on delivery, and that this may delay receipt of goods.