EU Value Added Tax advice from Royal Mail from 1st July 2021

By Chris Dawson June 10, 2021 - 11:00 am

Changes with regards to EU Value Added Tax (VAT) are coming to businesses selling goods to customers located in the EU. The changes will take effect on the 1st of July 2021. Royal Mail have three options available to help you manage these changes – depending on the size and nature of your business.

If you do nothing, then your item will be delivered Delivery Duties Unpaid (DDU). The customer may have to pay import VAT (and customs duties, if payable) and a handling fee in the receiving country. These charges will depend on the country you are sending to, the value of the item and whether it is a gift or commercial goods.

NB Amazon insist that items sold on their platform are delivered tax and duty paid!

Royal Mail EU Value Added Tax advice

1. Selling through a marketplace

If you sell through a marketplace, they are likely to have registered for IOSS. If so, you just need to assign their IOSS number in the pre-advice to us for the items sold through that marketplace.

This means that if you sell on marketplaces you will need to know their IOSS number AND figure out how any automation solutions you have can pass that number to Royal Mail to indicate that EU Value Added Tax has already been paid.

2. The Import One Stop Shop (IOSS)

You can register yourself, via an intermediary, and file your own EU VAT returns. Or, if you prefer to concentrate on selling, you may want to consider Royal Mail’s ‘assisted’ IOSS solutions with their partners Deloitte and Taxamo.

Whichever approach you choose it allows you to calculate and collect VAT from your customer at the checkout and pay it directly to the EU. You just need to assign the right IOSS registration number to each item in the pre-advice you give to us.

If you don’t use Taxamo Assure and you need help calculating tax then Royal Mail’s partner, Hurricane’s Aura service can do that in your checkout.

3. Postal Delivery Duties Paid (PDDP)

Royal Mail PDDP is currently undergoing trial, due to be operational by July. If IOSS isn’t for you, or you are sending items above €150, Postal DDP may be the answer. It allows you to calculate and collect VAT and customs duties from your customer at the checkout and pay it to the EU tax authorities via Royal Mail.

If you need help calculating VAT and customs duties then again, Royal Mail’s partner, Hurricane’s Aura service can do that in your checkout so allow time for integration before the 1st of July.

For more information on handling EU Value Added Tax when shipping with Royal Mail, see the help page on their website.

  • Paul Middleton
    2 weeks ago

    I would suggest broadening the discussion put somewhat to discuss the issue of whether UK businesses will be able to register for IOSS directly or need an intermediary. Plenty of discussion over on UKBF.

  • Jonty
    2 weeks ago

    As a UK registered VAT company, why on earth would we want to collect VAT for the EU? Most of our sales of antiques are via eBay auctions. We would be a net VAT contributor to EU for no benefit whatsoever. So on the 1st July we will no longer ship to EU.
    No more worries about “lost” parcels, no more customs declaration nonsense, no more postal delays and no more hoops to jump through.
    Thanks but no thanks.

  • Dave
    2 weeks ago

    another bite of the brexshit sandwich for small business sellers. Maybe Johnson and co can add this to the bits they want to “re-negotiate” since they found out what it means. I swear blind that oaf signed up at the 11th hour without having read a single page of the agreement. Day by day some new issue or problem creeps out. Sometimes better the devil you know, and that holds true to my mind. Personally unlike others i cannot afford to unilaterally cut off 75% of my market so i will keep selling to the EU. And i cannot imagine many real antiques going via a non tracked service, so there maybe the odd lost parcel, but being lost not claimed as damaged it will be insured.

  • timo
    2 weeks ago

    Yeah, and no more EU customers, no more sales, no more revenue, no more bills getting paid ….
    Why not stop selling to the UK too; no more invoices to print, no more parcels to pack-up, no more general, well, hassle of doing business.

  • Gav
    2 weeks ago

    Having read the email today from ebay for business, it looks like this EU VAT issue might not be a big deal, if you’re VAT registered and using ebay GSP. They’re handling the collection of EU VAT, will automatically have sellers use their IOSS number and deal with the customs procedures for them. All the seller has to do is have their listings include the appropriate VAT rate. EU sales would then be processed at the ex VAT price, goods sent to Ebay GSP as usual.

  • harami2000
    2 weeks ago

    Gav – the messages being sent by eBay are worded to direct people away from using the Royal Mail (dubious) because of the stated difficulties involved, and onto GSP Indeed, they are signing people up automatically for GSP (also dubious).
    Many buyers – myself included – refuse to use GSP due to the huge fees margins they add to share between themselves and their partner(s) as pure profit.

  • Mac
    2 weeks ago

    Be interesting to see the Ebay sales that aren’t through GSP for EU.

  • Spunktrumpet
    2 weeks ago

    DDU it is, the EU is no different than any other nation, why are we doing the hard work for them?

  • Leon
    2 weeks ago

    What if you’re a U.K. business but not VAT registered as yearly sales are under £60k.
    Would I now have to pay VAT to all sales to the EU?
    Will eBay automatically deduct this from the sale? How will I be able to claim this back if I’m not a VAT registered business ?

  • Paul Middleton
    2 weeks ago

    Well.., the UK introduced this on January 1st and is mandatory rather than optional, so at least the EU had the sense to ensure it’s not compulsory. They’ve done many things I don’t agree with over the years but this isn’t one of them.

    Paying VAT at the point of purchase rather than import is the way global e-commerce is going and it makes total sense. Avoid and save those annoying postage “handling fees” and just pay the VAT means that by all accounts, sales under €150 will feel the same as pre-brexit for our EU customers.

  • harami2000
    2 weeks ago

    Paul Middleton – It might seem to make sense, and at least means no “handling fees” if done right, but ecommerce platforms like eBay do NOT want to put in the work to get the tax rules correct and are currently imposing them illegally on items like books and magazines imported in the UK – applying 20% rates unless they are in one of a few categories, I think, but they refuse to add other categories and also charge the tax if an item is listed in two categories only one of which is taxable.
    It is a big hot mess… : (

    There is still no answer why eBay cannot work with Royal Mail for the EU’s IOSS for any customers who not wish to pay eBay for the privilege. Many of us have thousands of pounds of postage stamps to use and can no longer use them for sales to the EU without the customer being charged VAT twice – so much for technology in 2021, but eBay does not care as they would prefer to drive business to the shipping solution that generates additional profit for them (preferably GSP!)…

  • We are a amall buisiness sho sell through our website and eBay. We have stopped all EU sales from our website, to much hassle, time. However we still ship through eBay GSP and as far as i can tell if you are vat registered input your price inc VAT. EBay will net it back and if you can make sense of their reporting you can nil your vat return for oversea buyers. Its all a lot of hassle and we dread it if we get a return.

  • 2 weeks ago

    We sell on eBay mainly and Amazon. The situation for us is confused by many mixed messages (and, indeed , the lack of clear guidance. I am no longer VAT registered as I am trading below the £85,000 limit in the UK so do I have to re-register to be able to trade with EU? I do my own mail through local Post Office as I try and support local businesses as well get some exercise! Now it seems that eBay won’t give me an opportunity to write my own customs forms with their IOSS number so I will have to use GSP ( adding to my cost) I sell a lot of stuff to the EU so it is not a viable option simply to close that avenue down. Through my business life I have acted as unpaid tax gatherer for the UK Government but having to do that for the EU (after Brexit) is painful to say the least. PS maybe I will simply reopen my High Street shop and sell to local buyers ( so they can resell the stuff on eBay!)

  • 2 weeks ago

    As a small business, the cost of Royal Mail’s recommended IOSS partner (Deloitte) is prohibitive; £300 registraiton plus £2000 per year, plus the actual taxes and duties. Taxamo is cheaper, because it’s priced on a per-item basis, but still adds enough to make our products utterly uncompetitive for EU customers.

    Luckily I saw this coming, and from 2016 I’ve focused on UK and non-EU markets, and let EU sales gradually wither away.

    The EU clearly doesn’t want our businesses selling into the bloc, but don’t seem to recognise that losing their trade surplus with the UK could hurt them more. I regard the rest of the world as a far better trade opportunity, have been working hard to source from non-EU suppliers where possible, and have definitely abandoned the idea of my next car being German or French !

  • Alex McMillan
    2 days ago

    Has anyone managed to discover how much PDDP from Royal Mail will cost ?

Have your say

View our Comment Policy

Featured in this article from the Tamebay Guide – companies that can help you grow and manage your business.

Royal Mail

Royal Mail is the leading provider of postal and parcel delivery services in the UK. We deliver to over 230 countries and territories worldwide.

See More Companies >

Recent Comments

16 hours ago
BRYAN GOSTLING: what are private individuals supposed to do when sending parcels to EU?...
21 hours ago
SAM: Did not think I would have much use for PayPal after eBay bumped them. However...
1 day ago
Tony: That's why we don't use Paypal. There are much cheaper and better for a seller...
1 day ago
Max: Taxamo may be activated very quickly but requires technical expertise in house to integrate to...