Cross-border delivery solutions like Spring Clear can help UK e-commerce businesses streamline their delivery process.

Upcoming EU VAT Changes

From the 1st of July, the following changes will apply to goods that UK businesses export to the European Union:

●      There will be no more VAT exemption on consignments valued up to €22. All goods that are imported into the EU will now be subject to VAT.

●      Online marketplaces will become the deemed supplier when they facilitate certain cross-border B2C transactions on behalf of their third-party sellers. This means they'll be liable to collect, report and remit the VAT due from the consumer.

●      The Import One-Stop Shop (IOSS) will be introduced. It allows UK sellers and online marketplaces to manage, report and pay all the VAT they're due within the European Union via one partner: their VAT intermediary.

●      UK sellers are required to sign up with a VAT intermediary. This intermediary will act as their VAT representative in the European Union, sharing responsibility for submitting their business's VAT returns and making VAT payments on time.

How UK businesses can prepare

Here's what UK businesses can do to prepare for the upcoming EU VAT changes now:

  1. Register with a VAT intermediary. An intermediary can help track and submit the VAT that's due within the European Union in line with the latest regulations. Until the 15th of July, Spring customers can make use of a special onboarding offer with VAT intermediary Less Grey. Email to find out more.
  2. Get an IOSS identification number. UK businesses can register for the Import One-Stop Shop and get an IOSS identification number with the help of their intermediary.
  3. Digitally attach the IOSS identification number to orders that are sold to EU customers on or after the 1st of July. For goods that are shipped without an IOSS number after the 1st of July, recipients will need to pay any due VAT, as well as a local handling fee upon delivery. This may cause discontented customers.

Cost & Complications of the Cross-Over Period

Goods that are ordered, sent and arrive at their EU destination before the 1st of July will be unaffected by the upcoming VAT changes. However, goods that are sent before that date but don't arrive at their destination before July 1st will be liable to the new VAT rules. As IOSS data can't be applied to sales made before the 1st of July, the shipment's recipient will be asked to pay any due VAT, as well as a local handling fee which can range between €5 and €10 on average.

UK businesses are advised to warn their EU customers in advance that they may need to pay VAT and handling fees if their order arrives after July 1st to avoid any unpleasant surprises.

If recipients decline to pay these fees upon delivery, the seller's responsible for the administration and charges of returning the items.

Spring Clear: Making Shipping Easy after the 1st of July

With Spring Clear, the innovative shipping solution by Spring GDS UK, UK sellers can create a transparent customer experience and reduce export admin under the new EU VAT rules. Here's how it works:

  1. Customers can calculate the VAT and Duty they're due at checkout via Spring's Landed Cost Calculator. The calculator's easy to integrate and free of charge for Spring customers. Alternatively, businesses can include VAT / Duty charges into their selling rate.
  2. The customs experts at Spring's hub in The Netherlands will take care of export and EU import declarations. This includes the declaration and settlement of import VAT via the Import One-Stop Shop (IOSS) account of a VAT intermediary. The team can also settle Duty charges for shipments valued above €150.
  3. Packages and parcels are delivered to EU customers through reliable delivery partners. Spring GDS provides single item shipping that's as fast and transparent as commercial carriers, but much more cost-effective.

Want to Find Out More?

To learn more about the upcoming VAT changes and how e-commerce businesses can prepare, email and talk to a global delivery expert.

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