With a heavy heart today, I announce that I will temporarily cease sales from the web store direct to non-VAT registered EU customers from the 1st July 2021. Until the UK Government pulls its finger out and comes up with a more manageable system to work from within the UK. If you are VAT registered and wish to make a purchase please email me at email@example.com and I will be able to invoice you for products.
On 1st July 2021, the European Union (EU) will introduce the Import One-Stop Shop (IOSS) scheme.
The EU is removing the €22 VAT exemption for imports and all products. Instead, VAT will be charged on imports regardless of value. This means the exemption for goods valued up to €22 will no longer apply.
VAT will apply at the rate of the buyer’s country of residence. Unfortunately, this is not the same for every EU country, so I need to calculate and check the VAT for each EU country.
If I do not charge VAT, local agencies will collect directly from the recipient. You would be subject to VAT, processing fees, and import duties. I don’t want my customers to have to deal with these charges. There will also be significant delays for the customer.
From 1st July, purchases valued at 150 euros and under will be subject to Customs Fees, VAT charges and customs clearance.
From 1st July, purchases valued over 150 euros will be subject to Customs Fees, duties, VAT, and customs clearance. IOSS is not an option for this, so orders of this value range will attract a charge regardless.
Suppose I register for IOSS at least one EU member state. In that case, it means with a sale to the EU valued up to 150 euro, I will be responsible for the VAT, fees, and any other processing charges, so the buyer does not pay any. However, in addition to that, I would have to file a monthly VAT return under IOSS, which will include all my EU sales to all I sell to and Pay the EU fees and VAT for every sale I make.
I cannot use my accountant to handle this. This change means I must use a “VAT fiscal representative” (an accountant) based in the EU. Since my business is not EU-based, I must pay for a second accountant to do my EU VAT and Tax handling.
I’m not Amazon or eBay, who will have an entire team of staff to manage all this, taking responsibility for VAT collection on sales and I do not want to have to pay out large sums of money to a company to process this for me. I do not want to move any of my products to an online platform either. I have worked hard to build up a customer base.
There is barely any information regarding any of this on the GOV.UK web site. My brilliant accountant, who is always on top of changes, does not have any guidance to offer his customers. There has been a single paragraph update on 13th May 2021.
I’m not sure how long this will last, but I ask my EU customers if they want something, please order before 30th June.