EU IOSS Signup

Discussion in 'International Business' started by Graham Wharton, Apr 20, 2021.

  1. jfrm

    jfrm UKBF Newcomer

    5 5
    Update on intermediary costs. The cheapest one found in the end was Avask.
    Pricing for registering is £250 (one time payment)
    £1200 annually to conduct IOSS filings.
    Yes, it is money for old rope but sometimes one has no choice. The lead time for getting an IOSS number via the Spanish portal is around 3 weeks so we've taken the plunge. It's eminently clear that none of the issues being discussed will be resolved by 1 July so if we want to continue to sell from our website and send DDP into the EU from 1 July we are going to have to go the intermediary route. I daresay that within a year, there will be a clarification or agreement and hopefully we can then file direct - but it's not guaranteed to happen soon.
    FYI, it seems that Ireland, Poland and Spain have a working portal, at least. Germany not and they are apparently difficult to communicate with anyway. I know first hand that the French goverment are the ultimate bureaucratic nightmare so avoid like the plague. Only problem with Avask is that they don't offer registration via Netherlands or Ireland, our preferred countries (as they speak English). This is, of course, only an issue if we eventually start filing direct. While you have an intermediary it shouldn't be a problem.
     
    Posted: Jun 9, 2021 By: jfrm Member since: Jun 2, 2021
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  2. romeo b

    romeo b UKBF Newcomer

    19 8
    Thanks for the update, everything is helping people at the moment. I think for you it's obviously worth it, but certainly for us (not yet VAT reg'd in UK and under threshold) it's not viable.

    I guess the options are, for us anyway:

    1) Continue to sell via eBay - send stuff as we were, include the eBay IOSS number on CN22's (when they actually provide this to us...). Customer has paid VAT already, duty TBC depending whether Royal Mail introduce a DDP service you can utilise. I guess item value under threshold won't attract duty anyway (under €150).

    2) Sell via own website and customer accepts they will pay all fees at their end. Not ideal scenario in any means, but an option nevertheless in order to "continue" relatively. Again, customer will pay VAT at countries rate, and depending on order value the duty upon arrival if order exceeds €150.

    3) Stop selling to EU entirely via own website until a UK IOSS portal is established so we can sort the overseas VAT remittance out at our end to avoid the customer doing it.

    This is how I'm understanding this mess anyway. There's tonnes of info but you have to remember not everyone is VAT reg'd in UK so decoding and deciphering the smaller matters is getting tricky.
     
    Posted: Jun 9, 2021 By: romeo b Member since: May 17, 2021
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  3. jfrm

    jfrm UKBF Newcomer

    5 5
    Yes, I think in your situation, that is right. I wasn't sure if it was worth it for us, either, at first. I had to do some digging to see exactly how much profit we made from EU sales, first.
    Sending DAP to customers is not necessarily a big problem as long as you deal with it in a good way. If you make it clear up front (and before they order) what's going to happen, how long it will take and better yet, if possible, roughly how much extra they will get charged, then there are no nasty surprises. The customer can decide if they want to go ahead or not and you've turned a potentially bad experience into a perfectly acceptable one. Our experience has been that for normal small shipments, the extra cost to them is around a fiver (clearance + slightly more VAT than they used to pay pre-Brexit.)
     
    Posted: Jun 9, 2021 By: jfrm Member since: Jun 2, 2021
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  4. DefinitelyMaybeUK

    DefinitelyMaybeUK UKBF Contributor

    65 16
    There's also Taxamo PAYG as mentioned on the RM page:
    https://www.royalmail.com/business/international/guide/delivered-duties-paid
    This is stated as a £2 per transaction fee and might be a short-term solution at least for your own website using their API. The £2 looks to be far cheaper than any DDU handling fee in EU which can be from 5 to 20+ euro?
     
    Posted: Jun 10, 2021 By: DefinitelyMaybeUK Member since: Jan 12, 2021
  5. romeo b

    romeo b UKBF Newcomer

    19 8
    Thanks, will take a look - from what I am told, handling (duty?) is only on €150+ orders. I haven't had any reports so far of anyone paying duty on items for the most part (most of our items are £15, some £40 including postage) - although I do get a handling fee off TNT for 80usd items so I'll look into it.

    As it happens I've asked RM about the DDP services but nobody is replying and I can't get hold of anyone. Absolutely terrible. We have an OBA with RM and it's frustrating trying to speak to them about things.

    I notice RM says (on your link) it's aiming to be operational by July and undergoing trial. Probably why nobody is saying anything yet.

    Talk about last minute for everything!
     
    Posted: Jun 10, 2021 By: romeo b Member since: May 17, 2021
  6. DefinitelyMaybeUK

    DefinitelyMaybeUK UKBF Contributor

    65 16
    Yes, *duty* is/will be only on orders over €150 but AFAIK a handling fee we still be applicable to DDU (i.e not IOSS/DDP) orders after 1st July, as VAT needs to be collected for all orders not just those over €22 as it is today. The handling fees vary widely depending on country and a previous post list the known ones:
    https://www.ukbusinessforums.co.uk/...customs-charge-in-the-eu.410536/#post-3059166

    It could be that weighing these handling fees up against a PAYG charge makes sense, but then there's also a likely RM IOSS overhead to take into account for their new IOSS specific service codes (MTE/MP7 etc) which I haven't seen prices for yet.

    It's always possible RM will jump in and save the day with their PDDP solution which allows orders over €150 to be sent DDP too (unlike IOSS) - for anyone sending small parcel / higher value items via RM post, then this *could* be a single solution to implement (but I wouldn't hold my breath on that...)
     
    Last edited: Jun 10, 2021
    Posted: Jun 10, 2021 By: DefinitelyMaybeUK Member since: Jan 12, 2021
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  7. schmexit

    schmexit UKBF Newcomer

    46 5
    Thanks for sharing your findings with us. It's still so expensive!
     
    Posted: Jun 10, 2021 By: schmexit Member since: May 7, 2021
  8. schmexit

    schmexit UKBF Newcomer

    46 5
    That could be a good solution in the meantime. Thank you!
     
    Posted: Jun 10, 2021 By: schmexit Member since: May 7, 2021
  9. romeo b

    romeo b UKBF Newcomer

    19 8
    Thanks - although it says at bottom of that post that "although the duty threshold remains at €150." So guess we'll find out about the changes in handling fees if anything or if they remain as per that list, but the country list is useful.
     
    Posted: Jun 10, 2021 By: romeo b Member since: May 17, 2021
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  10. romeo b

    romeo b UKBF Newcomer

    19 8
    I saw that £2 per item, that's the duty handling itself, so there's still the VAT to account for though. You couldn't send it using a DDP service if the tax is outstanding.. DDP means it's good to deliver to the customer, I think? So you need to have the VAT element already sorted before paying the £2 per item.

    If you sell through eBay, do they handle the duty? I guess not. So maybe if you sold something through ebay the following would happen:

    Example: On eBay, you sold an item for £10. If VAT in customers' country is 20%, they owe an extra £2.00 (and they'll have paid eBay this £2 already). But you need to send it then using a DDP service. So maybe RM will be introducing (into Click&Drop) DDP services in replacement of the normal services. So you take the DDP hit unless you've added this onto your prices, I guess. The DDP isn't the tax element of the item. It's the "release" cost (clearance) so an additional postage service (at this point anyway, on eBay after the customer has paid you).

    But to do this through your own website you'll need to incorporate a method of calculating the tax owed on a per-country basis, get customer to pay it to you, you send item using the DDP service just like if you send it on eBay (which costs more as it's clearing the duty side of the item), and you remit the VAT back to Taxamo PAYG system somehow. Maybe. It's frying my brain day by day this mess.

    The problem is twice the mess (for me anyway) as we sell both through eBay and our own website. It is not cost effective to be signing up to a £1200+/annum pricing for IOSS.

    The annoying thing is most stuff we sell is £10-15 and if we do nothing, these items become twice the price with the VAT and Duty when they land.

    No wonder so many are saying it's killing their business entirely.
     
    Last edited: Jun 10, 2021
    Posted: Jun 10, 2021 By: romeo b Member since: May 17, 2021
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  11. Morning

    Morning UKBF Contributor

    10 10
    I haven't been following what Ebay are doing (so they might be doing something weird), but it shouldn't be necessary to post Ebay items DDP because if they're under 150 Euro, they should be sent along with Ebay's IOSS number and the VAT will be collect the the point of sale. If an item has an IOSS number, it clear customs immediately, so there's no clearance fee.

    It's the same with Taxamo Assure - you send the item with Taxamo's IOSS number. The VAT is collect at the point of sale, through the integration of Taxamo Assure and your shop checkout.

    Edit: The £2 Taxamo fee isn't a duty handling fee (there's no duty under 150 Euro), it's their fee to act as the entity liable for the VAT.

    Edit again: Taxamo Assure and Ebay are doing the same thing - acting as the 'facilitating marketplace' so they collect the VAT at the point of sale and remit it to the EU.
     
    Posted: Jun 10, 2021 By: Morning Member since: May 14, 2021
  12. romeo b

    romeo b UKBF Newcomer

    19 8
    Thanks a lot. There are others reading your posts even more clueless than me and trust me it is a big help.

    It's difficult to get to grips with it all when it's not been a problem previously. Especially as information is still sporadic, unconfirmed and developing. RM don't even have a DDP system in place yet and we're a fortnight off supposedly having to use it for DDP qualifying consignments.

    Right.. so in short if you use Taxamo, you pay them £2 and somehow they'll do the VAT side of it - aka we charge the customer the VAT and give it back to Taxamo in some method, plus £2 per item fee.

    But eBay are just collecting the VAT from the customer, paying me the difference, and me sending my stuff as normal but using their IOSS number, which means it's "cleared" aka tax paid.

    So sounds like on our own website, we'd benefit from building in the VAT rates per country, charging the customer it and remitting this to Taxamo (however this happens, maybe a monthly bill) or whatever plus their £2 fee.

    Tax not paid on an item means it accrues the Duty side of it, aka "item not cleared" and a handling charge.

    Duty. Tax. Remit. VAT. One moment I'm thinking I totally get it and the next I'm actually talking about the entirely wrong aspect of it.

    (all whilst trying to produce goods)
     
    Posted: Jun 10, 2021 By: romeo b Member since: May 17, 2021
  13. Morning

    Morning UKBF Contributor

    10 10
    Remember, duty is a specific thing, and it's only due on packages over 150 Euro. That's why the IOSS caps out at 150 Euro. If the IOSS is not used (either through direct registration, an intermediary, Taxamo or a marketplace), and no IOSS number is included in the data along with the package, VAT is due on all packages and duty is due on packages over 150 Euro. The postal services will collect that from the buyer, along with a handling fee. It's not a customs fee, or a duty fee, it's a fee to pay for the time and money the postal service has spent handling the process.

    Sending packages DDP is a different thing entirely, where the postal carrier will pay the VAT (and duty if applicable) and charge the seller rather than the buyer. And will of course charge a fee for the service.

    If you use Taxamo Assure, it needs to be integrated into your checkout process, by API or something or other (I don't know about these things). VAT rates, the collection of VAT and the payment of VAT are all taken care of by Taxamo. I don't know at what point the £2 fee comes in, ie when that's paid, but it could be paid by the seller independently of the customer payment process. Maybe it's deducted from the total Taxamo gives the seller. I'd think it unlikely the customer will see that £2 fee (it won't be on their invoice), though most sellers will likely up their p&p to compensate. Dunno, didn't spot that detail.
     
    Posted: Jun 10, 2021 By: Morning Member since: May 14, 2021
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  14. DefinitelyMaybeUK

    DefinitelyMaybeUK UKBF Contributor

    65 16
    IIRC from the Taxamo pages, the seller gives card details upfront, so the VAT due is paid at the transaction time and the fees are paid monthly. oh yeah:

    https://docs.assure.taxamo.com/docs/billing-faqs

    The 'real' customer is sent notification of VAT having being paid.
     
    Posted: Jun 10, 2021 By: DefinitelyMaybeUK Member since: Jan 12, 2021
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  15. Morning

    Morning UKBF Contributor

    10 10
    Thanks, should've just gone and looked again as the info was right there! I quite like it as a system, hopefully Bluepark will allow it to be implemented soon. Though I can't help feeling that £2 is quite a fee considering, unlike an intermediary, there's no risk of the seller not paying the VAT, as the seller isn't involved at all. Are Ebay/Etsy raising fees to implement the IOSS? Did they raise fees when they had to start collecting UK VAT on imports in Jan?
     
    Posted: Jun 10, 2021 By: Morning Member since: May 14, 2021
  16. romeo b

    romeo b UKBF Newcomer

    19 8
    I've once again had an email off eBay about upcoming VAT changes and with instructions to use the eBay-provided IOSS number on outgoing UK-EU items, but they have not told us anywhere or communicated this to us.

    Customer support aren't replying in live chat.

    Customer support who I did get through to said I'd have a reply within 7 days (that was 2 weeks ago) - received nothing

    No documentation online showing their IOSS number anywhere that I can see.

    Seems like the "Developer" style eBay sellers had an email with an IOSS number on but other sellers haven't been told, yet are being bombarded with "make sure you provide our IOSS number" emails.

    Anyone got a clue?
     
    Posted: Jun 11, 2021 at 10:48 AM By: romeo b Member since: May 17, 2021
  17. YourWorkersLTD

    YourWorkersLTD UKBF Newcomer

    2 0
    We're also waiting to see what the situation will be like. Not sure if Amazon has given the IOSS number?
     
    Posted: Jun 11, 2021 at 11:15 AM By: YourWorkersLTD Member since: Feb 11, 2015
  18. ADC

    ADC Contributor

    137 16
    I wonder how it will work at customs? Will customs get the order number and the IOSS number from eBay or Amazon when transaction goes through, so they know the customer has paid? Otherwise it's open to massive fraud with people just using any old IOSS number.
     
    Posted: Jun 11, 2021 at 1:50 PM By: ADC Member since: Jun 25, 2009
  19. YourWorkersLTD

    YourWorkersLTD UKBF Newcomer

    2 0
    Exactly my thoughts also. It seems ripe for fraud :/
     
    Posted: Jun 11, 2021 at 2:05 PM By: YourWorkersLTD Member since: Feb 11, 2015
  20. schmexit

    schmexit UKBF Newcomer

    46 5
    I will check with Taxamo, but their website says:

    "Taxamo Assure integrates into your customer checkout journey and controls the real-time VAT calculation, invoicing and VAT number validation on your sales i.e. goods consignments below €150. As you process sales, these transaction details are tracked and Taxamo Assure takes responsibility to file and remit the VAT* due."
     
    Posted: Jun 11, 2021 at 6:33 PM By: schmexit Member since: May 7, 2021