Part of our complete guide to ecommerce seller tax.
Why UK sellers suddenly needed to think about EU VAT
Since the UK left the EU VAT area, sales from the UK into the EU are treated as imports from a third country, not intra-EU sales. That triggered VAT and customs complications for UK sellers shipping to EU consumers, complications the EU itself tried to simplify with two specific schemes: OSS and IOSS.
OSS: for goods already inside the EU
The One Stop Shop applies when you're selling goods that are already physically located inside the EU, for example stock held in an EU fulfilment centre, to consumers across different EU member states. Rather than registering for VAT separately in every country you sell into, OSS lets you report and pay VAT for all EU sales through a single registration in one member state.
IOSS: for goods shipped from outside the EU
The Import One Stop Shop is the one that matters most for UK sellers shipping directly from the UK to EU consumers. It covers goods valued at €150 or less sent from outside the EU. Registering for IOSS lets you charge and collect the correct EU VAT at the point of sale, so the parcel clears customs without the buyer facing a surprise VAT bill and handling fee on delivery.
Key point: Without IOSS, your EU customer typically gets stung with VAT and courier handling fees when the parcel arrives, a poor experience that drives abandoned deliveries and refund requests. With IOSS, VAT is collected cleanly at checkout and the parcel moves through customs without that friction.
Registering as a non-EU seller
As a UK business, you're outside the EU for these purposes, which generally means you need to appoint an EU-established intermediary to register for and operate IOSS on your behalf, you can't register directly in most cases. This intermediary cost is a real factor to weigh against the volume of EU sales you're actually doing, it's worth doing for a meaningful volume of low-value EU parcels, less obviously worth it for occasional sales.
Is it worth setting up?
- Regular EU sales under €150 per parcel: IOSS is generally worth the intermediary cost, it removes a genuine customer-experience problem
- Occasional or one-off EU sales: the intermediary cost may not be justified relative to the sales volume, worth reviewing case by case
- Higher-value items over €150: IOSS doesn't apply anyway, normal import VAT and customs procedures apply instead
Selling into the EU and not sure which scheme applies? Book a free consultation and we'll work through your EU sales volume and the right VAT approach, as part of our VAT returns service.
Frequently asked questions
What is the difference between OSS and IOSS?
The One Stop Shop (OSS) covers goods already inside the EU when sold to EU consumers, while the Import One Stop Shop (IOSS) covers goods shipped from outside the EU, such as the UK, valued at €150 or less.
Do I need to register for VAT in every EU country I sell to?
No, registering for IOSS or OSS in a single EU member state lets you account for VAT across all EU sales through that one registration, rather than registering separately in each country.
What happens if I don't use IOSS for low-value parcels?
Without IOSS, the EU customer is typically charged VAT and handling fees on delivery by the courier or customs, which creates a poor buyer experience and often leads to abandoned or refused parcels.
Can a UK business register for IOSS directly, or does it need an intermediary?
As a non-EU business, the UK generally needs to appoint an EU-established intermediary to register for and operate IOSS, which is an additional cost to factor into the decision.