THE INDIE PRESS NETWORK GUIDE

Delivering to Mainland Europe after Brexit: IOSS

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Delivering to mainland Europe after Brexit has been a well-documented ‘nightmare‘ for indie presses, with many publishers no longer able to post items to the continent.

This article discusses what has happened, and highlights possible solutions.

What was the scenario before Brexit?
Previously, as the UK was part of the EU bloc, publishers were able to post books out, and the recipient country’s customs would pass it along, without levying any charges, since the UK ‘zero-rates’ (doesn’t add VAT to) book sales.

And what about now?
In simple terms, after Brexit, without this protection, VAT is due on books, charged at the rate in the destination country, which varies by member state. Publishers are now faced with the option of calculating the VAT due and paying it, thus making packages Delivered Duties Paid (DDP), or to send the book as usual, Delivered Duties Unpaid. If using the latter option, in theory the recipient hears from their country’s customs with a bill for the VAT and an additional admin charge; in practice many publishers report the majority of parcels being returned, marked ‘unclaimed’.

For most, however, setting up, calculating, reporting VAT in every single member state of the EU is just not possible – the administration burden would be huge. As a result of changing legislation the EU set up the Import One Stop Shop (IOSS); now companies can declare and file VAT returns for all EU member states in one place.

The catch is you need to be an EU citizen to sign up to the scheme.

Practical options
If presses have an EU citizen as a director they may well be able to opt for a DIY model – if you do this we would be interested to hear how you get on.

It has been well documented that Estonia offers a digital citizenship, which allows UK citizens to sign up and become an honorary EU citizen, and therefore eligible for the IOSS scheme. This is the basis of many IOSS solutions, and could no doubt allow for a DIY model.

For the majority, however, a third-party solution is needed.

Royal Mail
At the time of writing the Royal Mail are rolling out a Postal Delivered Duties Paid service, which helps customers to work out the VAT due on each item and to declare, pay and export.

Other options
There are now many options available that claim to take the hassle out of these VAT filings, most of which charge a monthly fee, from pocket change to thousands. For this guide we have covered one option with a subscription model like this; largely subscription options are not suitable for indie presses, who cannot justify (or wish to pay) hundreds a year to enable sales that might not cover the cost, but the below is inexpensive.

EAS Project (easproject.com)
One such solution is EAS Project, which was highlighted in 2023 by the IPG. Here is Renard Press‘ experience:

(Full disclosure: we have no affiliation with EAS, but have lived experience with them and rate their offering.)

We granted EAS access to our website, where they set up their plugin, all the tax rates from around the world, etc. They registered us as digital residents in Estonia, granting us eligibility for the EU’s IOSS (see above).

This means if someone visits our website from, say, Denmark, the plugin knows it’s a 25% VAT rate on books there, so adds this to the cost of the book that the customer sees. At the end of the month they pull all the data together and send me an email saying ‘£XXX of VAT this month – here’s an invoice’. We pay them (in euros), they declare it on our behalf and send us an email to confirm the VAT bill has been paid. It’s been very simple for us, they did all the set-up and are always at the end of an email.

In terms of pricing, I think our subscription option is now deprecated, but we opted for pay-as-you-go, and in general they charge us a few euros a month, just added to the invoice. (The new system seems to start at €9.90 a month, for 10 VAT calculations – see more via the PDF below – which probably works out around the same for presses posting ~5–10 parcels to the EU per month.)

When you’re registered they send you your IOSS number, with instructions on how to add it to your Royal Mail digital account. This means that when you process orders this VAT declaration is fed through to Royal Mail and on your shipping labels you’ll have the magical IOSS logo, which sends the parcel skipping through customs. (I’m told it’s possible to add manual dummy orders – for review copies, for instance – and the answer was yes, and they will show you how to do it, but haven’t used this yet.)

The whole of the above – from initial meeting to sending our first IOSS-stamped parcel – took about a week, but I think they can be more reactive if necessary.

In terms of results, while it’s hard to tell exactly what’s going on, I would say that around 20% of our parcels were being returned before we signed up with EAS, and now it’s rare to have an issue – I would say EU returns now are only as common as they were pre-Brexit, and are likely down to address issues rather than customs. I haven’t seen any customs rejections since.

Indie Presses who would like to discuss collaboration with EAS can book a meeting here, or email the COO Teemu.

Resources:

ABOUT THIS ARTICLE
Last updated: 14th February 2024
Author(s): Will Dady, Renard Press