Is your business one of the 47% UK businesses whose sales and revenue have been impacted due to reduced or complete halt to trading with the EU?
Despite EU being the biggest trading partner for the UK, the value of UK goods exported to the EU fell by 45% between December ‘20 and January ‘21.
GFS has partnered with SimplyVAT to debunk some of the biggest myths and misconceptions that are standing in the way of qualified businesses rebooting sales with the EU and widening their market share.
IOSS: 5 Myths on Post-Brexit Trade with the EU
Post-Brexit Trade with EU countries is Complicated
The Import One Stop Shop (IOSS) was launched in July 2021 to simplify online selling for eCommerce businesses shipping to the EU, but many businesses who qualify for this service are still hesitant to reconnect their trade ties. VAT collection and reporting for sales to all 27 EU countries can be simplified by registering in just one EU member state, sparing you the pressure of creating multiple VAT declarations for each country.
IOSS makes Cross-Border Selling Expensive
On the contrary, for any business sending parcels to the EU, IOSS is the most cost-effective approach to send parcels, as it takes away the hassle and cost of paying differing fees per parcel based on the handling fee of the receiving country, value, and nature of each item. It also eliminates any ‘surprise costs’ as customers have visibility on exactly how much they are being charged including VAT.
Border Clearance is a Hassle Post-Brexit
Once your business is IOSS registered, custom declarations and cross-border shipping can be made paperless, which makes it less prone to errors and unexpected customs charges, delivering your goods across to customers faster across all EU member states.
Your Business has to deal with an Increased Workload
Under the new rules, an IOSS intermediary is normally required for non-EU businesses. This intermediary is accountable to sort out your IOSS registration and submit your returns. Also getting a delivery partner onboard to handle cross-border shipping means you can focus purely on internal operations and selling, leaving the rest with the intermediary partners.
Handling VAT = Headache
After charging the due VAT on checkout at the point of sale, businesses using IOSS will be able to ship the goods VAT-exempt into the EU. As VAT would have already been collected at the point of sale by the seller, the parcel will be customs-cleared without VAT being due upon importation. A monthly IOSS return and VAT payment will be due to remit the VAT collected from EU consumers.