IOSS For Businesses
As of July 1st 2021, the way UK businesses pay VAT on goods sold to EU customers has changed. Your business can now use Import-One-Stop-Shop (IOSS) to help you continue trading easily with the EU from the UK.
If this is news to you, don't worry! Parcel2Go is here to help you every step of the way.
What is IOSS & Why Should I Use it?
IOSS is an online VAT registration scheme that UK businesses can use to comply with the EU's new VAT requirements on goods sold to EU customers and valued up to £135/€150.
IOSS will save your business and its EU customers time and effort by meeting VAT requirements at the point of sale, rather than the point of import / prior to delivery.
You can learn more about these changes on the European Union's website or our IOSS FAQs page.
Who Should Use IOSS?
If your business sells goods to EU customers worth less than £135/€150, IOSS is a great option. With VAT requirements taken care of at the point of sale, all your customers have to do is wait for their parcel to be delivered!
If your business only sells on a marketplace (think Ebay or Amazon!), you don’t need to use IOSS directly. The marketplace is responsible for collecting and paying EU VAT charges, not you!
In this scenario, your marketplace will give you an IOSS number.
If you use Smart Send, the IOSS number will be automatically passed to Parcel2Go
If you use our standard booking process, you simply add your IOSS number when entering the parcel details.
Our Top Tips:
If your business sells items worth up to £135/€150 to EU customers, IOSS will simplify the payment of VAT for you!
Do I Have to Sign Up to IOSS?
You aren't required to sign up, but bear in mind, IOSS makes it much easier for UK businesses selling goods to EU customers.
I Still Don't Want to Sign Up!
Want to learn more? We’ve got everything you need to know about DDP & DDU here. If IOSS still isn't for you, EU VAT can be paid in a different way. You have two options:
Option 1 - Delivery Duty Paid
Your business pays local VAT before shipping. This can be done within the order journey on Parcel2Go.com. This process is known as Delivery Duty Paid (DDP), and is in operation as of July 1st 2021.
Option 2 - Delivery Duty Unpaid
The customer pays local VAT before customs releases the goods for delivery. This is known as Delivery Duty Unpaid (DDU).
Our Top Tips:
If you intend to sign up for IOSS, but don't act or have a solution in place by July 1st 2021, your goods will be delivered by DDU by default.
What About Goods Worth Over £135/€150?
IOSS doesn't apply to goods worth over £135/€150.
In this scenario, your choice for paying EU VAT is between DDP & DDU. (See Options 1 & 2 above)
How Do I Register for IOSS?
Businesses based in the UK need to appoint an EU-resident intermediary, like a tax agent, to register for them. An intermediary will then perform the following actions on their behalf:
Submit monthly IOSS VAT returns that contain the total value of the goods sold, their VAT rate and the total VAT amount to be paid, broken down by standard and reduced rate and for each EU country where the goods are transported to.
Make a monthly payment of the VAT due as declared in the IOSS VAT return.
Meet Avalara
When selling internationally, we understand that managing your tax can be complicated! That's why we've joined forces with tax experts Avalara who provides expansive, cloud-based systems to help its customers manage their Sales and Use tax as well as VAT compliance obligations.
Their team of tax experts are on hand to offer guidance to any Parcel2Go customer looking to sell goods overseas. Avalara is able to manage all forms of transactional taxes regardless of industry and is a smart choice for e-commerce companies looking to tackle the complexities of international tax structures.
Use the contact form below to get in touch with an Avalara representative:
Get in Touch
Once registered for IOSS, You Can:
Display the amount of VAT your EU customers need to pay at the end of the order process.
Collect VAT from EU customers on goods bound for an EU country.
Provide the IOSS number for customs clearance to Parcel2Go as part of the order process.
Submit electronic monthly VAT returns via the IOSS portal of the country where you are registered for IOSS and make a monthly payment of the VAT declared to that country.
How is IOSS VAT Calculated?
IOSS VAT is calculated using this simple formula:
Value of Item + Shipping Cost x VAT Rate of Destination Country
You can find VAT Rates for all EU Member States here.
GPSR: Updated General Product Safety Regulations
As of 13th December 2024, new regulations have been introduced to enhance product safety for consumers and provide clearer guidelines for businesses shipping to the EU and NI. The question on most peoples mind is Does GPSR Apply to Me?
The key change for UK-based businesses and online sellers is the requirement to appoint a ‘responsible person’ based in the EU or NI. This individual is responsible for overseeing compliance and product safety requirements. Additionally, all packaging must adhere to GPSR labelling regulations.
