Shipping goods from the UK to the EU has become more complex since Brexit took effect. Additional steps, such as IOSS registration, VAT, and duty requirements, need to be considered. This guide aims to provide a simple overview of these processes to help merchants navigate these new challenges.
1. Understand the IOSS Registration Process:
- You are required to charge and collect VAT (if you're registered) at the appropriate rate based on the delivery address of the purchaser within the EU. This varies between 18% and 28%. Fortunately you only have to deal with one body to pay that VAT to, and that is the IOSS.
- IOSS (Import One Stop Shop) is an optional simplified electronic system that allows merchants to collect, declare, and pay VAT on goods sold to customers in the EU.
- Register for IOSS with the tax authority in your home country. If you're based in the UK, you can register for IOSS with HM Revenue and Customs (HMRC).
- Obtain an IOSS number after successful registration. You will need to provide this number to your shipping carrier.
2. Determine Whether IOSS is Applicable:
- IOSS is mainly relevant when the value of the goods is less than €150.
- If your goods exceed this threshold, the VAT and duties are generally collected from the recipient by the customs authorities in the destination country.
3. Calculate VAT and Duty:
- For goods where IOSS is not applicable, calculate the VAT and duty that may be charged by the destination country's customs authorities.
- VAT rates and thresholds vary across EU member states, so it's crucial to research and understand the relevant rates for each country you plan to ship to.
4. Prepare Customs Declarations:
- Ensure you are familiar with the customs documentation and procedures required by the destination country.
- The customs declaration (CN22 and CN23) may include information such as the value of the goods, their origin, description, and quantity.
- For goods worth less than €150 use CN22 and for over €150 use CN23
- Every product has an HS code which is an internationally recognised code to identify what an item is and the level of duty that might be due on it.
5. Communicate with Shipping Carriers:
- Coordinate with your shipping carrier to ensure they are aware of the new processes and requirements.
- Provide your IOSS number or any other relevant documentation to your shipping carrier to facilitate smooth customs clearance.
Many of the UK's carriers have managed to simplify the process of purchasing your shipping with APIs for the most popular shopping carts. Royal Mail's Click and Drop service is one of the most popular. Currently you will still be printing out two labels (the shipping label and the customs declaration) but in the near future this will be combined into a single document.
To recap, register your business with the IOSS. (Note: if you sell through Amazon or Ebay you will need to obtain their IOSS numbers) and provide it to your carrier. Find out the HS codes for the goods you sell. Your eCommerce software may have a dedicated field for this data which will streamline your operation further.
Navigating the post-Brexit shipping process may initially seem daunting, but with careful planning and understanding of the new requirements, it's possible to successfully ship goods from the UK to the EU.
