HMRC has released brand new guidance on the Import of VAT One Stop Shop (IOSS). From March 1, 2024, eligible sellers will have the option to register online for the VAT Import One Stop Shop (IOSS) program.
The UK launched the IOSS Import One-Stop Service, which aims to streamline the import VAT declaration and payment process for UK cross-border sellers trading across the EU and Northern Ireland.
When can IOSS be used in the UK?
If you import goods with a value of £135 or less (known as low value goods) into a country outside of the EU and Northern Ireland and sell them to consumers in the EU and/or Northern Ireland, then you can choose to register with the VAT Import One Stop Service IOSS to report and pay VAT to the EU and/or Northern Ireland.
To use the program, your shipment must meet all 3 of the following criteria:
The sale of goods takes place in a country/region outside the EU and Northern Ireland.
A single item not exceeding £135 in value
The goods will be sold to consumers in the EU or Northern Ireland.
IOSS does not apply to the following:
Goods containing excise goods, such as alcohol and tobacco products;
Selling low value goods to UK consumers from outside the EU and Northern Ireland;
Sales to VAT-registered businesses.
Simply put, if your business in the UK specializes in cross-border e-commerce, and if an item is imported from a country outside of the EU and Northern Ireland, the value of a single item does not exceed £135, and the consumer purchasing the item is from the EU and/or Northern Ireland, then your transaction falls within the scope of the IOSS to qualify as a one-stop-shop for VAT imports.
For cross-border sellers in the UK, there is no need to register with the EU IOSS when conducting the above cross-border business, and they can file their returns directly with the UK tax authorities.
So if you're a UK company looking to expand your cross-border e-commerce customer base into the EU and Ireland, then IOSS is a relatively smart choice.
Attention:
1. If you sell low-value goods through an online marketplace, the online marketplace will be responsible for reporting and paying any VAT payable.
2. If you have already registered an IOSS in an EU country, you need to cancel the registration in that country before you can apply for a UK IOSS with HMRC, you can only register one IOSS.
For Chinese cross-border sellers, just continue to use the EU One-Stop Import Service (IOSS) provided by the platform. There is no impact, no need to register for the UK IOSS, we will take this as policy information to understand.
The policy content is translated from the UK Inland Revenue and is for reference only.
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