The Import One-Stop Shop (IOSS): five essential questions answered for UK retailers


Brexit hasn’t been an easy ride for many UK retail exporters. The stormy waters they found themselves in at the start of the year have taken time, hard work and considerable patience to navigate. 

So it’s understandable that the imminent prospect of further Brexit-related change is causing apprehension and nervousness in some quarters. 

However, the introduction of the Import One-Stop Shop (IOSS) on July 1st should be welcomed as that rarest of things – a legislative change that actually makes trading easier. In fact, if you’re a UK-based eCommerce provider shipping products directly to EU customers, IOSS makes exporting more straightforward across the whole of the European market. 

What is happening?

IOSS has been created to prevent fraud and maximise the amount of tax collected by EU member states from eCommerce sales into Europe. It means that you can clear all your parcels into the EU through one EU VAT number and settle your EU-wide VAT bills using the same number.

From July 1st, instead of setting up VAT registrations in every European market you sell to, retailers can register in a single EU market (it doesn’t matter which), sign up to IOSS and get a single ID number to go out on every EU order taken. 

A new IOSS portal will allow retailers to log in and pay their quarterly EU VAT bills. The portal then does the hard work of calculating which member states are owed what VAT, and distributes the money accordingly.

Are all retailers affected?

Using IOSS is mandatory for all retailers that send eCommerce sales directly from the UK. If you’re a retailer selling via online marketplaces, sales that you send directly need to carry your IOSS ID number, while sales packed and shipped by the marketplace itself will use the marketplace’s ID.

What’s the upside?

IOSS is genuinely far simpler than the current, convoluted approach to EU-wide VAT collection. By making it a mandatory system and including the ID numbers on customs documentation, IOSS also ensures more effective compliance at the border – if you don’t have an ID number, you aren’t registered to sell into the EU.

We welcome these improvements, and we’re advising our clients to get signed up at the earliest opportunity so that they can ensure business continuity when July 1st arrives. There’s currently an estimated four-week backlog for VAT registration, so now really is the time to take action.

What’s the downside?

Practically every significant change to exporting systems and processes comes with unintended consequences – this is normal given the vastness and complexity of international trade. But, without wanting to be unduly optimistic, the downsides of IOSS so far look pretty limited. 

Most notably, the ‘no VAT applied to shipments valued under €22’ caveat is being axed. This will mean retailers need to add VAT to all of their sales up to €150. Above €150, and you’ll carry on using the existing Delivered Duty Paid system. 

It’s possible that some lower volume retailers that have previously flirted with exporting to the EU may now decide it’s not worth it. And retailers will need to make sure they’re charging the correct VAT rate for each country at the checkout; otherwise, they may end up having to cover a shortfall themselves once they log into the portal to pay their bill.

However, this a small price to pay for eliminating the complexity of having to VAT register in each individual EU member state. Yes, you’ll need an ‘EU-based intermediary’ to set up your VAT number and secure your IOSS ID, but if you have a good fulfilment provider, they should be able to point you in the right direction. For example, in our business, we’ve appointed a global VAT specialist partner and made it as simple as possible for our clients to get registered.

Will IOSS be the last of the Brexit changes?

In theory, the introduction of IOSS marks the last of the significant changes affecting UK retailers and eCommerce exporters. Large providers already appear well-prepared for the changes, and we’re working hard to reach out to as many of our small-to-mid-sized clients as possible to help them get up-to-speed before July 1st

A few years ago, the idea of fulfilment providers acting as informal trade consultants would have seemed far-fetched. However, in the post-Brexit world, this sort of added value needs to be provided as standard across the logistics sector, so that smaller eCommerce providers can access the expertise they need to navigate these complex systems.

Of course, while the initial Brexit horror stories may have subsided, both the EU and UK markets have had to re-educate themselves, and this process is still ongoing. So let’s embrace IOSS as a positive change for all UK retail exporters while continuing to expect the unexpected as we go forward. After all, if there’s one thing we’ve learnt about Brexit, it’s that crystal ball gazing is a fool’s errand.

Credit: Mark Elward, Chief Commercial Officer at Huboo

Mark Elward is Chief Commercial Officer at Huboo, a UK-headquartered fulfilment technology provider committed to extending best-in-class, affordable fulfilment to retailers of all sizes, eCommerce providers and D2C brands.