Understanding postage / tax to and from the EU

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Willz the Wargamer
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Understanding postage / tax to and from the EU

Post by Willz the Wargamer »

As you may or may not be aware its has become somewhat problematic to send or receive items from out side of the UK from Jan this year.
Found this information on Brigade Models Web site, this explains some of the changes since brexit and gives some hope that things will improve.

First, the bad news – as of the end of this month (June 2021), the 22€ threshold for import VAT on packages into the EU will be abolished; from July 1st, all packages into the EU from outside will be subject to VAT at the local rate for the destination country, regardless of value, and most if not all postal services also charge a fee for this. Obviously this is not something we have control over, but we thought it fair to warn you – we wouldn’t want anyone to be surprised by this. This is likely to have the effect of making small orders from the UK to the EU uneconomical, since the fee alone can be in the order of 10-15€.

However, a new system called IOSS (Import One-Stop Shop) is coming into operation at the same time. Under this system, the seller (us) will charge the buyer (you) VAT at the time of purchase (just like we used to do, but at your national rate instead of the UK rate). We account for this on the customs label on your parcel, and it should go through your postal service without any further delays, checks or fees. This makes the process easier for you, since you won’t face any surprise fees when the goods are delivered, everything is paid up front. There are a couple of minor wrinkles in this (there’s a maximum order size of 150€) but nothing insurmountable. :moredrink:

Willz.
FreddBloggs
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Re: Understanding postage / tax to and from the EU

Post by FreddBloggs »

The biggest issue is it means as the seller you have to be uk vat registered, for larger orders you can sign up for the VAT MOSS system.

The wrinkle I have not yet found on ioss, is that limit inclusive or exclusive of the shipping cost?
Willz the Wargamer
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Re: Understanding postage / tax to and from the EU

Post by Willz the Wargamer »

FreddBloggs wrote: Thu Jun 24, 2021 11:02 am The biggest issue is it means as the seller you have to be uk vat registered, for larger orders you can sign up for the VAT MOSS system.

The wrinkle I have not yet found on ioss, is that limit inclusive or exclusive of the shipping cost?
I don't have any answers at the moment.


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Re: Understanding postage / tax to and from the EU

Post by World2dave »

It's all very confusing, but check with EB and he'll make it all make sense for you.
I recently received some display cabinets from Germany with no tax paid in either country, and apparently that's all tickety-boo. Bloomin' marvellous, etc.
FreddBloggs
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Re: Understanding postage / tax to and from the EU

Post by FreddBloggs »

the Uk is not checking incoming stuff due to no staff, bit the receiviung EU countries are being thorough.
Shahbahraz
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Re: Understanding postage / tax to and from the EU

Post by Shahbahraz »

Isn't the no-checking stuff into the UK supposed to end at the end of June?
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FreddBloggs
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Re: Understanding postage / tax to and from the EU

Post by FreddBloggs »

Do not look at me.

I know less than the gov on this and ghey know nowt.
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Re: Understanding postage / tax to and from the EU

Post by FreddBloggs »

A reasonable explanation of what is happening.

https://uk.interparcel.com/blog/busines ... e1d0b25052
Willz the Wargamer
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Re: Understanding postage / tax to and from the EU

Post by Willz the Wargamer »

Found this on the Fighting 15's web site give more insight to import /export,

The EU’s new rules on import tax come into force today and will have precisely no effect on Fighting 15s sending orders to customers there. They affect what happens from the customer’s end, but here in the UK we’ve been living with much the same EU-agreed laws on imports since 1 January 2021 – the UK simply brought them in then because of Brexit, whereas the EU delayed their introduction because of the pandemic.

In short, Fighting 15s continues to deduct VAT from orders to the EU, and this is automatically done in the shop once an EU country is chosen as the delivery destination in the shopping cart. Customers will continue to pay import VAT and a handling fee to the delivery company, usually their country’s mail service. This works better for some countries – Germany, Finland, and Sweden, for example – than for others, such as The Netherlands, Belgium and Denmark, because the handling fee for collecting tax charged by some countries is tiny, whereas The Netherlands’ mail service has the most ludicrously high handling fee of all the EU nations.

The first change on 1 July is the abolition of the 22euro threshold before import VAT is charged. That means no order going to the EU in theory escapes taxation. It is probably no longer worth EU customers placing orders under this threshold because they will get hit with disproportionately high charges on import. If you’re going to order, order big and dilute the effect of the charges. It remains to be seen whether EU mail services will fail to collect VAT on each and every small value item because of the volume of work involved.

The second change is the introduction of the Import One Stop Shop (IOSS), which potentially allows companies outside the EU to collect the VAT at the point of sale, avoiding the unpleasant surprise of a separate charge to the customer. IOSS is currently a complete non-starter for a business such as Fighting 15s because the EU currently requires the appointment of a fiscal representative in the EU to be responsible for the VAT. The cost of doing so ranges from £1,250 to £5,000 a year, with the Royal Mail’s preferred option costing £2,000 a year. Appointing a fiscal representative would require us to add a charge of more than £20 to each and every order from Fighting 15s to the EU. Customers in countries that have a low handling fee are therefore much better off ordering direct and paying import tax and handling fees on import; customers in countries that have a high handling fee aren’t actually much worse off simply paying the import tax and handling fee.

Fighting 15s therefore ruled out IOSS months ago after discovering the costs. If we were still as big as we were as agent for AB and Eureka, two years ago, it would be worth the cost.

It’s not all gloom. Royal Mail has an alternative tax payment route for IOSS via Taxamo which costs only £2 a parcel. However, the only shopping cart for which it is available is Magento (plus an API integration for custom carts), and Fighting 15s uses WooCommerce. If Taxamo rolls out a version for other shopping carts, then we hope in the future to be able to go down the IOSS route for prepayment of import VAT at very little cost to EU customers. It therefore seems better to wait rather than rush into expensive IOSS registration or use other workarounds.

If anyone's got the will to live having read this stay safe and happy gaming :moredrink:
Willz.


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Shahbahraz
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Re: Understanding postage / tax to and from the EU

Post by Shahbahraz »

Sometimes it's very hard to keep comments non-political. :wall:
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