New EU VAT Rules

I wanted to write to you with an important update about new VAT rules as a consequence of Brexit and the establishment of the Northern Ireland protocols, which you may have seen in the news. The changes come into force on the 1st of July 2021, but we are concerned that many of the adjustments to billing, VAT collection, courier integration, and shipping rules could cause considerable delays and confusion amongst our customers.

These rule changes affect you if you sell to UK customers and the goods are located outside the country at the point of sale; and if goods are sold on a marketplace by an overseas seller. If you sell on channels like Amazon and eBay they will now have to collect VAT on your behalf when shipping orders from the UK to Europe. This is part of a big effort to close the £5bn ‘eCommerce VAT gap’ where goods reach European consumers from overseas without paying VAT.

Ideally, we’d like to be able to give you firm guidance on what to do to minimise any disruption. For example, you should still register for the EU’s Import One Stop Shop (IOSS), a VAT registration scheme your business can use from 1 July 2021 to comply with the EU’s new VAT e-commerce rules on sales from Great Britain (England, Wales and Scotland) to the EU. If you are dispatching goods from Northern Ireland to EU you can use the One Stop Shop (OSS).

However, incredibly, even with just a week to go before these new rules are implemented, the government has admitted the portal to register for the UK’s IOSS won’t actually be ready before 1 July 2021.

“A business not established in the EU or Northern Ireland wishing to register for IOSS will be able to do so in any EU member state or in the UK. However, it is not expected that the UK IOSS registration portal will be available for use for the 1 July 2021 launch. Further guidance on this will be made available before 1 July 2021.”

We know this is complicated, and we understand it’s frustrating, but we also want you to know that we are absolutely committed to making our systems work as effectively as possible and incorporating these changes with our partners. 

It’s likely too that there will be additional complications and delays and we will have to make tweaks and changes for sometime after the deadline as our partners work out what changes are required themselves. Just as we discovered in the initial stages of Brexit, many won’t surface until after the deadline has passed.

As ever, we will do our best to make as many of the changes as possible.  Our team are already working flat out to implement as many of the changes we have information for right now.

Yours Sincerely,

Stuart Forrest 

Chief Operating Officer

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