UK Parliament flags ViDA and Customs IOSS reforms as potential friction for UK businesses trading in the EU

30 November 2023

The UK Parliament’s European Scrutiny Committee has published concerns around the EU’s VAT in the Digital Age (ViDA) 2025 proposals to make the Import One Stop Shop mandatory and to remove the low value threshold of €150.

The committee highlighted that making the IOSS mandatory with no low value threshold would force UK businesses into using the reporting mechanism. This would mean UK businesses would have to charge and collect VAT when selling to EU customers, as well as engage a fiscal representative (intermediary) in the EU to report and remit this VAT on their behalf. This would create a significant administrative burden for effected companies and would have a financial impact too.

These concerns are raised even though the UK has no VAT registration threshold for non-resident businesses, and expects all non-resident suppliers importing and selling low value goods to consumers in the country to VAT register.