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Customs Conundrum – A look at post-Brexit shipping options to Europe
On 1 July new EU rules came into force regulating the shipping of items sold to the continent via online shops. As with all regulations the rules are not simple and place burdensome new requirements on businesses attempting to sell to customers in Europe. For museums with online shops navigating these rules successfully is essential to preserving a significant revenue stream. Edward MacWhirter from Associate Supplier Museum Shops, highlights the range of options available.
Option 1: Zero rating
This is the default option that MuseumShops currently uses for all EU-destined sales. Find the setting in your online shop that governs tax rates and set all EU destinations (as well as the Channel Islands) to 0% VAT. This will ensure that the customer pays no tax at checkout. When filling out the customs form for the courier or at the post office (usually CN22A or CN22B) the VAT number field must be left blank.
However, this option does not remove the obligation to pay VAT, it instead shifts responsibility from the business to the customer to pay. Your shipping policy page must make it clear that the Customer may have to pay local VAT rates and possibly a handling charge for their item to be released via customs. Obviously, this is not ideal from a customer service perspective, which leads to the next option.
Option 2: Import One Stop Shop Registration
In 2020 the EU set up a one stop shop system for VAT. The IOSS allows UK businesses to register for VAT in one EU country and submit EU-wide VAT returns. The business will need to be able to account for VAT rates for all EU member states (most ecommerce software has this capability) and submit regular VAT returns to the EU authority where registered. An EU-based intermediary is required for this service, often at a steep annual charge.
However from October this year, MuseumShops will be making its IOSS number available for partners to use for dispatching items to the EU. MuseumShops will therefore be able to assume responsibility for VAT payments to European tax authorities for all transactions made via the museumshops.uk platform.
Cease sending to Europe
This is the nuclear option which many museums have been forced into by the new requirements. While this does avoid the risk of hidden charges annoying EU customers it also removes any element of choice. Whilst regulations might ease with time, the direction of travel has not been encouraging.
A final word of advice; if it’s edible, drinkable or otherwise alive, do not send it to Europe! The customs paperwork for sending items in these categories is so complicated that nine or more times out of ten an item will not reach the customer. If you would like to learn more about dispatching to the EU or would like to enquire about becoming a MuseumShops partner, get in touch at email@example.com