Home Business Insights & Advice UK businesses must act now to prepare for the EU VAT changes

UK businesses must act now to prepare for the EU VAT changes

by LLB Finance Reporter
30th Jun 21 1:44 pm

From the 1st of July 2021, UK-based e-commerce businesses and online marketplaces will be affected by the European Union’s changing VAT legislation. The new EU VAT rules come with the introduction of some new structures like IOSS, Union Oss and VAT intermediaries. But what do these terms actually mean? Craig Lee, Head of Sales & Marketing at Spring GDS UK, explains.

“Since the UK has left the European Union, UK businesses have had to navigate more paperwork and regulations when selling and shipping to the EU. From the 1st of July 2021, more changes will come into effect, mainly with regards to the way that VAT is tracked, managed and paid within the European Union.

Besides the fact that all goods that are imported into the EU will now be subject to VAT (there will be no more VAT exemption on consignments valued up to €22) and online marketplaces will become the deemed supplier when they facilitate certain cross-border B2C transactions on behalf of their third-party sellers, the European Union will require non-EU sellers – including the UK – to make use of some new structures: IOSS, VAT intermediaries and Union OSS. It’s important that UK e-commerce businesses and online marketplaces understand what these terms mean.

What is IOSS?

The Import One-Stop Shop (IOSS) is the electronic portal that UK businesses can use to report VAT on consignments valued up to €150 that they export to customers within the European Union from the 1st of July 2021. With IOSS, sellers, or deemed supplier marketplaces, will have to register for VAT in just one EU state through an intermediary. They will be issued a unique IOSS identification number which will indicate to customs that VAT is being properly declared, helping to ensure speedy customs clearance.

From the 1st of July, the Import One-Stop Shop will be the easiest way of complying with the new EU VAT regulations.

What is a VAT intermediary?

A VAT intermediary will act as the VAT representative for UK businesses, helping them to obtain an IOSS registration number and manage VAT within the European Union. They are partly responsible for submitting VAT returns on behalf of the UK business and making VAT payments on time, in line with the latest EU legislation.

UK businesses and online marketplaces that sell to customers within the European Union need to register with a VAT intermediary now to avoid costs and complications further down the line.

Until the 15th of July, Spring GDS UK is running a special onboarding offer with VAT intermediary Less Grey. Email [email protected] to find out how your business can benefit.

What is Union OSS?

The Union One-Stop Shop (OSS) is the electronic portal that UK businesses can use to  comply with their VAT obligations on consignments valued above €150 that they ship to customers within the European Union from 1 July 2021. With Union OSS, online sellers and marketplaces based in the UK can register for VAT in one single EU member state and report VAT for all intra-EU distance sales of goods as well as business-to-consumer services in one single place. This way, all VAT on distance sales to the EU can be declared in one single electronic quarterly return.

Spring Clear: One Single Solution for IOSS and Union OSS

To help UK businesses that sell to the EU adapt to the upcoming EU VAT changes, we’ve developed Spring Clear: the one-stop-shop solution for shipping to the EU after the 1st of July.

With Spring Clear, UK sellers can create a transparent customer experience and reduce admin under the new EU VAT rules. EU customers can calculate the VAT and Duty which is due at checkout via Spring’s Landed Cost Calculator; the customs experts at our Spring hub in The Netherlands will then take care of export and EU import declarations. On top of that, we do what we do best: ensure your packages and parcels are delivered to your customers through reliable delivery partners in a cost-effective way.

Does your business need help managing its sales to the EU after the 1st of July? Find out how to get on board with Spring Clear, or email [email protected] to get in touch with our team of global delivery specialists.

Spring. We listen. We inspire. We deliver.

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