Have I got this right.. If I register for IOSS and sell below <£135/€150

[Karimbo]

.. I wont actually have to pay any VAT to the EU?

I am trying to make sense of mumbo jumbo. It said something along the lines of low value goods below €150 - the customer does not pay any VAT.

Does that mean therefore me as the UK seller don't need to hand over any VAT to EU?

My average basket value is £22. Many countries had exemptions to import VAT & duty for low value amounts. But that's been removed.

What's the cheapest way to get IOSS registration? I am looking at MyVAT which charges £10 a month.

 

[DefinitelyMaybeUK]

Have I got this right.. If I register for IOSS and sell below <£135/€150​

.. I wont actually have to pay any VAT to the EU?

No, that's not right. The whole point of IOSS is that you pay the EU customers' import VAT. You can either register yourself via a EU VAT intermediary (>£2000 a year for their services) or use a PAYG service like Taxamo for low volumes. I haven't looked at MyVAT. I only use Taxamo. There is a whole IOSS thread if you a have a spare hour or two, some of which may be out of date, others bits are sadly still relevant like the poor UK/EU TCA on mutual VAT Mutual Assistance Agreement:

EU IOSS Signup

Has anyone found a way to sign up to the IOSS system in the EU without having to appoint an EU VAT intermediary. The guidance says it is not necessary to have an intermediary if there is a vat mutual assistance agreement, which the EU and UK now have.

www.ukbusinessforums.co.uk

The definitive EU guide is here:

VAT One Stop Shop

Enter the world of VAT One Stop Shop

taxation-customs.ec.europa.eu

 

[Karimbo]

Sorry, thank you for clarifying. Completely misread. :S

It's just not worth it to pay all that money for membership. I thought it was a no brainer. But with IOSS fees and all that. PLUS full EU VAT that you can't reclaim off any input VAT - it's really unattractive.

I would need to hike prices up for EU customers which I might cross when the time comes. At the moment I'm selling goods via paid traffic, targeting UK only. If/when I get a load of organic traffic from EU countries I may capitalise on this by making it more expensive for EU buyers to cover the costs for me.

 

[Customs Geek]

Hi Karimbo

Definitely Maybe has answered most of your questions.
You do not need to charge your customers UK VAT but the VAT in the EU destination country is payable.
You are correct that the low value VAT exemptions have been removed . The customs duty exemption remains at €150 which is why the IOSS threshold is set at that level.

IOSS is not compulsory at the moment if you are selling directly through your own website. If you do not register,however, your customers will need to pay import VAT at the point of import which is likely to slow delivery down. The courier companies also tend to charge for the admin in collecting the VAT.
If you do register for for IOSS you need to charge your customers at their local VAT rate.

 

[japancool]

PLUS full EU VAT that you can't reclaim off any input VAT - it's really unattractive.

You charge your EU customers VAT. You then pay that VAT to the EU authorities. Your sales are outside the scope of UK VAT. There's nothing to reclaim. Or do you mean for the membership fees?

 

[Karimbo]

It means the sales tax costs the business more than the vat rate customer pays.

 

[japancool]

It means the sales tax costs the business more than the vat rate customer pays.

On the other hand, some businesses are experiencing customers refusing orders due to the unexpected tax they have to pay, or the high processing fees. Those fees also makes your prices less competitive.

It's obviously your calculation though as to whether the potential lost business (if any) is preferable to the higher tax.

 

[LPB 123]

It means the sales tax costs the business more than the vat rate customer pays.

What does this mean?

 

[Martin Global]

Worth noting is that if you sell to EU on marketplace and the value does not exceed £135, marketplace covers import VAT. If not I might be a little cheeky here and intrest you in my company as we do UK>EU logistics in DDP format where your customer doesn't wait/pay for the customs/vat (as long as it's under £135)