IOSS implementation for Customs Declaration Service (CDS) declarations in Northern Ireland
31 May 2023
Purpose
The purpose of this briefing note is to provide information on the CDS changes that are due to go live with CDS R4.1.0, scheduled Live Implementation Date 24th June 2023. These changes will only be available as part of the CDS declaration service on direct imports into Northern Ireland (NI) where the EU’s Import One Stop Shop (IOSS) Scheme is used. This briefing note will cover:
- an introduction to IOSS
- how IOSS works on CDS
Introduction to IOSS
On 1 July 2021, the EU introduced the IOSS VAT reporting and accounting system. Businesses can choose to use the scheme where they sell (non-excise) goods located outside of the EU and UK, including NI, in consignments not exceeding £135 (€150), to consumers in the EU and NI. Businesses that have opted to register for IOSS in the EU are required to charge and collect the VAT due at the point of sale. The VAT is reported on the IOSS monthly VAT return.
How IOSS works on CDS
Businesses that have chosen to register for IOSS in the EU will have an IOSS VAT ID number.
The new CDS functionality will enable an IOSS VAT ID number to be input on a full or simplified (including Super Reduced Data Set [SRDS]) customs declaration (H1, H7 or I1) for direct Rest of World to Northern Ireland imports of low value goods. Where a business is registered for IOSS, the IOSS number must be provided and included on the declaration
CDS will validate the IOSS VAT ID number and the declaration, which will need to include the value of the consignment in UK sterling.
The IOSS declaration will also need to include the relevant procedure codes and the value of the consignment in UK sterling. This includes:
- F48 (which relieves the Import VAT)
- FR5 (role code indicating IOSS dec type)
- C07 to indicate goods under £135
IOSS is not valid for use with Excise goods (the exception to this is perfume and toilet waters).
IOSS is valid for goods falling under P&R restrictions/requirements but can only be used with a full declaration type (H1).
Where a valid IOSS VAT ID number is provided the IOSS registered business must report and account for any UK VAT due through their monthly IOSS return.
A Technical Specification and CDS scope guidance were published on 27/04/23 and are available on the developer hub. This includes the full declaration completion requirements for IOSS. The Tariff is being amended to reflect the new IOSS declaration requirements.
General information on the EU IOSS scheme: https://vat-one-stop-shop.ec.europa.eu/index_en