HMRC VAT Import One Stop Shop (IOSS) launches 1 March 2024

27 February 2024| CATEGORIES: e-Commerce, EU VAT, HMRC, IOSS| TAGS: e-commerce, HMRC, IOSS, Northern Ireland

From 1 March 2024, businesses in Northern Ireland or Norway, which sell low-value goods imported from outside the EU and Northern Ireland to customers inside those regions can register with HMRC to use the import one stop shop (IOSS) system.

What is the IOSS?

The IOSS is an optional simplified VAT accounting scheme that can be used to account for EU VAT on distance sales transactions. The scheme came into effect on 1 July 2021. A business can choose to register for the IOSS scheme to report and pay VAT on goods valued at £135 or less (low value goods) that are imported into the EU or Northern Ireland and sold to consumers in the EU and/or Northern Ireland. Previously, a VAT registration may have been required in as many member states as the business was importing into.

Currently, Northern Irish businesses are only able to register for the IOSS in an EU member state. From 1 March 2024, Northern Irish businesses will be able to register with HMRC for the Northern Ireland IOSS.

A business can only register for one IOSS scheme. If a business is already registered for the IOSS scheme in an EU member state, it must cancel that registration before registering for the Northern Ireland scheme.

UK legislation and HMRC guidance

The Finance Act 2021, Section 95 and Schedule 18 (Distance Selling: Northern Ireland) (Appointed Day No. 2) Regulations 2024 bring the relevant legislation into force, and HMRC have published a collection of guidance on the IOSS, including guidance on registration, returns, and payment.

What is included on the IOSS VAT return?

To use the scheme goods must:

• be located in a country outside the EU and Northern Ireland at the point of sale;
• have a consignment value of £135 or less;
• be sold to a consumer in the EU or Northern Ireland.

Transactions excluded from the IOSS VAT return

You cannot use the IOSS scheme for:

• consignments containing excise goods, this includes alcohol and tobacco products;
• sales of low value goods from outside the EU and Northern Ireland to consumers in Great Britain;
• sales to VAT-registered businesses.

UK VAT on sales of low value goods that are located in Great Britain (England, Scotland and Wales) at the point of sale to consumers in Northern Ireland must not be reported on the IOSS VAT Return. The VAT due on these sales must be reported on the UK VAT Return. This includes sales from the Isle of Man to Northern Ireland.

VAT on low value goods sold through an online marketplace will be accounted for by the marketplace.

Who can register?

The HMRC IOSS scheme is available to:

• businesses in Northern Ireland;
• businesses in countries that the EU has concluded and recognises an agreement with on the mutual assistance for the recovery of VAT — currently only Norway.

To register for the HMRC IOSS scheme a business must:

• sell goods imported in consignments, with a value of £135 or less, from countries outside the EU and Northern Ireland to consumers in the EU, Northern Ireland or both;
• be registered for UK VAT.

Businesses from outside the EU and Northern Ireland will in future be able to register through an intermediary, but the Northern Ireland IOSS is not yet available for intermediary registrations.

Businesses registered for the IOSS in the EU which import low value goods into Northern Ireland (excluding sales from Great Britain) must inform HMRC they have registered for the VAT IOSS scheme in the EU.

Please get in touch if you require any further information on the IOSS.