Import One-Stop-Shop (IOSS): How we can help

From 1st July 2021, all commercial goods imported into the EU from third countries are subject to Import VAT, as well as customs clearance fees etc. irrespective of their value (prior to this date products under 22 euros were exempt).  

Where the goods have been sent to EU customers, for example a French individual has purchased a coat over the internet from a UK store, the fees would often need to be paid by the customer at the border before they could receive the goods from the courier.  This can make it a very expensive purchase and the fees are often unexpected by the customer, meaning a lot of packages are returned to suppliers.  This can add even further costs for the supplier.

IOSS platform from 1^st July 2021

In order to provide a much simpler process, the EU have launched a new Import One-Stop-Shop (IOSS) platform for these distance sales into the EU.  IOSS facilitates the collection, declaration and payment of VAT for sellers with a single monthly return, whilst making the process much easier for the end customer.

IOSS works by replacing the Import VAT usually due at the border, with supply VAT chargeable at the time the order is placed by the customer.  The supplier would charge VAT at the rate which is applicable in the customer’s country at the point of sale (or checkout). There should be no further payments due from the customer after this point.

The supplier then completes one monthly IOSS VAT return for all sales made to EU customers and makes a singular monthly payment for the VAT due.  They also need to provide all of the required information for customs clearance to the person declaring the goods at the border, including their IOSS VAT identification number. 

Non-EU suppliers will have to appoint an intermediary who is based in the country of the IOSS registration to act as a conduit between the supplier and the tax authority.  You can choose which country you would like to register for IOSS in.

The IOSS rules are optional and can only apply for goods under 150 euros which are not subject to excise duties, such as alcohol or tobacco.

Note, Northern Ireland is treated as part of the EU rules for IOSS purposes, and UK businesses selling low value goods to Northern Ireland can account for these goods on their IOSS return.  If you have registered for IOSS and are selling goods to Northern Ireland, you must tell HMRC your IOSS registration number.

Online marketplaces

There are separate rules if you sell your goods via an online marketplace, such as Amazon or eBay.  In these situations, the online marketplace will be the deemed supplier to the customer, and they will need to charge the VAT, and file and pay the monthly IOSS returns. 

Alternatives to IOSS

If the goods you are exporting do not qualify for the IOSS scheme, or you don’t want to register for IOSS, there are a number of options available to you.

Some of these options include keeping the current processes where your customers pay Import VAT and charges at the border, utilising your courier’s DDP services, such as the Post Office’s Postal Delivery Duties Paid service, or registering for VAT in the EU and holding stock overseas and selling via the EU’s One Stop Shop system.

How we can help:

• Look at whether IOSS would be beneficial
• Assisting with IOSS registration and returns
• General Brexit VAT advice

Contact us if you would like further information regarding IOSS or how we can help. 

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

Ad Valorem’s joint Managing Directors Nikki and Nigel Adams win Practice Pioneer Award at the prestigious Accounting Excellence Awards 2021.

The Accounting Excellence Practice Pioneer Award is arguably the most sought after, prestigious accolade in the accounting industry, having been judged by past winners, industry leaders and regulatory body figure heads. The judges look for individuals who have led ground-breaking initiatives in their practice, contributing to strategy, innovation, process changes and service excellence. The initiatives are reviewed by the judges in line with evidence of the impact they have had on both clients and the profession as a whole. The judges look for a Practice Pioneer who not only has expertise in their field but who also shows a genuinely innovative approach to the wider challenges facing the accounting profession.

“People traditionally think of accountancy as a numbers business, but in the SME market, it’s really a people’s business”

_{-Joint MD Nikki Adams}

It is therefore a great achievement and huge honour that Nikki and Nigel have won this award jointly, being recognised for their contribution at Ad Valorem and how this has impacted the wider accounting profession.

Nikki and Nigel are huge advocates of technology, whether it’s using Xero with our clients or Salesforce to streamline internal processes. The use of technology has enabled Ad Valorem to become a truly digital practice, utilising the best tech available to provide insight and advice to clients through enhanced collaboration. Although advocates of technology, Nikki and Nigel put enormous emphasis on the importance of humanising customer interactions. They have championed the development of our team, even in difficult times over the COVID period, to enable them to grow, build and support each other, whilst encouraging a collaborative approach across departments. This has led to a rounded customer experience where clients benefit from dealing with one point of contact, who liaises with specialist service areas internally.

Alongside their technology and internal process contributions at Ad Valorem, Nikki and Nigel also work closely with young people on their career development, working with students where they may not have been recognised for their academic performance, drawing on Nigel’s own background and experience. Nigel didn’t come into accountancy an easy way and it was only after being personality profiled that his abilities were revealed, and accountancy was suggested as a career path. Nigel spent 11 years juggling full-time employment and achieving his ACCA qualification. This start gave Nigel experience in many different areas: running his own gardening business, working in small and large practices, and gaining international experience while working in industry. Always challenging the accepted, Nigel has become a leading innovator in the small business sector and enjoys sharing his background across industry forums.

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Being a small family business ourselves, our culture and having a family feel is extremely important. Nikki’s focus on culture, passion for people and ability to build teams has created a dynamic workplace, inspiring collaboration and development. Nikki and Nigel have championed a new structure that enables career progression, that unlike the traditional “partner” based format, utilises a 6-member pod system with a clear pathway for individual development and growth. The pod system also enables us to keep the small family team feel, which we believe is key to our team and clients in the micro/SME sector.

All at Ad Valorem Group would like to take the opportunity to congratulate Nikki and Nigel for receiving such prestigious recognition.

 enquiries@advaloremgroup.uk  . 01908 219100 . advaloremgroup.uk . @AdValoremGroup   

Autumn Budget 2021

On Wednesday the 27th of October, Chancellor Rishi Sunak announced the 2021 Autumn Budget. The Chancellor set out the government’s tax and spending plans for the road ahead.

Please see below a few key points taken from Wednesdays budget:

New announcements with immediate effect:

• 30-day reporting and payment deadline for CGT on UK residential property extended to 60 days for transactions that complete on/after 27 October 2021 (the deadline is similarly extended where non-residents dispose of other UK land and buildings)
• High Income Child Benefit Charge is to be brought within the discovery assessment regime; this will apply retrospectively
• Cross-border group relief for corporation tax to be abolished w.e.f. 27 October 2021
• Increases to various ‘cultural’ tax reliefs (e.g. for theatres and orchestras) from 27 October 2021

New announcements taking effect later: 

• 100% Annual Investment Allowance for qualifying plant and machinery – limit to remain at £1 million until 31 March 2023
• Residential Property Developer Tax to be introduced from 1 April 2022: 4% of profits above £25m that are derived from UK residential property development
• Car fuel benefit multiplier for 2022/23 is £25,300
• Van benefit charge for 2022/23 is £3,600 and the van fuel benefit charge is £688
• National Insurance Contribution (NIC) thresholds for 2022/23 increase by 3.1%, except the Upper Earnings Limit for Class 1 and Upper Profits Threshold for Class 4, which are both frozen
• ISA investment limit unchanged for 2022/23 at £20,000 (£9,000 for Junior ISA)
• Annual Tax on Enveloped Dwellings (ATED) rates rise by 3.1% from April 2022
• Reform of basis period rules for unincorporated business and LLPs is to proceed (2023/24 will be the transitional year)
• Temporary reliefs for Business Rates for small businesses in 2022/23, with longer term reform of the system and reliefs for expenditure to be introduced in April 2023
• Reform of Air Passenger Duty from April 2023: decreases for domestic flights and increases for ‘ultra-long haul’
• Consultation for fundamental reform of alcohol duties, including incentives for pubs by reducing the duty on draught alcoholic drinks

Confirmation of matters previously announced:

• National Insurance Contributions (NIC) and dividend tax rates to rise by 1.25% from April 2023 to help fund health and social care (NIC rates will return to current rates for 2023/24, when the separate Health and Social Care Levy is introduced)
• Structures and Buildings Allowance – changes to Allowance Statement requirements
• ‘Notification of uncertain tax treatments’ will be introduced for large businesses from 1 April 2022, requiring HMRC to be told if they take a tax position in their returns for VAT, corporation tax or income tax (including PAYE) that is uncertain
• New late submission and payment penalty regimes to be introduced for VAT (for APs beginning on or after 1 April 2022), MTD ITSA from April 2024 and other ITSA taxpayers from 6 April 2025
• Changes to the ‘Scheme Pays’ reporting deadline from 6 April 2022, where a taxpayer wishes their pension scheme to meet an Annual Allowance tax charge above £2,000
• Making Tax Digital for Income Tax Self Assessment (MTD ITSA) to be introduced from 2024/25, with an extra year’s delay for general partnerships.
• Minimum pensions age to access private pensions increases from 55 to 57 from 6 April 2028

Autumn Budget

2022/23 Tax Rates

If you have any questions regarding what was outlined in Wednesdays budget update, please do not hesitate to contact us:

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk