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UK concerns on EU IOSS

UK Parliament’s European Scrutiny Committee flags ViDA and Customs IOSS reforms as friction for UK businesses; plus ongoing cost of EU fiscal representation

The UK Parliament’s European Scrutiny Committee has published its concerns on the EU VAT in the Digital Age 2025 proposals to make the IOSS return mandatory, plus 2028 Customs reforms. The committee believes this will impact Northern Ireland businesses, as well as wider UK companies paying high fees for fiscal representation on IOSS.

The relates to the 2019 Brexit Withdrawal Agreement and Northern Ireland Protocol which put Northern Ireland in both the EU and UK Customs and VAT regimes.

Both of these IOSS measures are outside of the new Windsor Agreement’s (which replaced the Northern Ireland Agreement) Stormont Brake. This is a mechanism to give Northern Ireland the option to object to any EU-NI rule changes.

2 reforms to complicate Northern Ireland-EU VAT compliance

The Import One Stop Shop return was introduced as part of the 2021 e-commerce VAT package. It enables sellers or deemed supplier marketplaces to report import VAT charged on small consignment B2C import sales. This applies for consignments not exceeding €150. The Committee highlights that the Government did accept as part of the Windsor Framework that it will now implement the EU’s iOSS scheme for parcels brought into Northern Ireland from outside the EU and the rest of the UK (so-called ‘rest of the world’ or ‘RoW’ e-commerce imports), having previously delayed doing so

The proposed 2028 Customs reforms would remove the above threshold of €150 and make IOSS mandatory.

The second concern is the ongoing requirement of UK businesses wishing to use IOSS for sales of goods to EU consumers to appoint an EU fiscal representative in most EU states. This puts an extra cost and administrative burden on UK businesses.


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