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UK & EU Shipping: VAT and IOSS Guidelines

UK & EU Shipping: VAT and IOSS Guidelines

Quick Answer

Shipping to the UK: goods valued at £135 or less are duty-free but subject to 20% VAT, collected at checkout by the seller or marketplace. Shipping to the EU: VAT applies to all values; orders up to €150 can be collected via IOSS. From 1 July 2026, the EU abolishes the €150 duty exemption and applies a €3 flat customs duty to low-value parcels; the IOSS VAT mechanism remains unchanged.

Scope: e-commerce and commercial parcels shipped from Hong Kong to the UK and the 27 EU member states via Fuuffy. Verified June 2026; UK HMRC and European Commission announcements prevail if policies change.

UK and EU Tax Thresholds in 2026

Customs authorities classify your shipment based on the declared order value. Thresholds are assessed on the intrinsic value of the goods, excluding shipping and insurance.

Destination & ValueImport DutyVATClearance
UK ≤ £135Exempt20%, collected at checkout by seller or marketplaceSimplified
UK > £135Charged per tariffCharged at importFormal (DDU or DDP)
EU ≤ €150€3 flat duty from 1 July 2026Always applies; collectable at checkout via IOSSIOSS simplified
EU > €150Full duty per tariffCharged at importFormal; IOSS not available

Notice

The EU has abolished its €150 duty exemption: from 1 July 2026, e-commerce parcels under €150 are subject to a transitional €3 flat customs duty, until the new customs system launches around 2028 and standard tariff rates apply. The UK's £135 duty relief remains in place for now, but the UK government has announced its removal by March 2029 at the latest — plan your pricing ahead.

What Is an IOSS Number and Why Does It Matter?

IOSS (Import One-Stop Shop) is the EU's electronic tax scheme for cross-border e-commerce orders valued at €150 or less. At checkout, your store or marketplace collects the destination country's VAT in real time (standard EU rates range from about 17% to 27%). When shipping with Fuuffy, simply enter your IOSS identification number (12 characters starting with IM) in the platform.

Two key benefits of declaring with IOSS:

  1. Faster clearance: when customs scans the electronic pre-arrival data and validates the IOSS number, the parcel is confirmed as VAT-paid and released quickly, without manual valuation queues.
  2. No double charging for your buyer: without an IOSS number, the local courier collects VAT from the recipient plus a customs handling fee (typically over ten euros, varying by courier and country), which often leads to abandoned parcels.

How to Fill In IOSS and Tax Details on Fuuffy

Follow these three steps when creating a shipment:

  1. Enter an accurate 6-digit HS Code: the EU fully enforces ICS2 pre-arrival data screening. Provide the precise 6-digit HS Code for each item (for example, 392690 for plastic phone cases); customs systems automatically cross-check descriptions against codes.
  2. Fill in the IOSS number under tax information: in the "Tax & Customs Information" field, enter the IM-prefixed number published by your marketplace (such as eBay or Etsy) or registered by your own store.
  3. Confirm the duty payment mode: orders with a valid IOSS clear under the simplified mode by default. If the order value exceeds €150, or you have no IOSS and want to bear the taxes as the seller, select DDP (Delivered Duty Paid); the courier will bill you for the overseas taxes afterwards.

Two Tax Pitfalls E-commerce Sellers Often Hit

Warning: never use someone else's or an invalid IOSS number

Customs systems verify the registration status of every IOSS number. Entering an invalid code, or using a marketplace's IOSS on orders from another channel (for example, applying eBay's IOSS to your own Shopify orders), is treated as false declaration: the parcel is detained, the buyer is re-taxed with possible penalties, and your shipping account may face credit downgrades from logistics providers.

Notice: commercial goods cannot be declared as "personal gifts"

Gift relief (UK £39 / EU €45) applies only to non-commercial parcels sent between private individuals, and inspection rates are high. If customs opens a parcel and finds retail goods with original tags, they will revalue it at local market prices and charge taxes; undervaluation may also incur penalties.

Expanding into the UK and EU markets? For help with IOSS entry or DDP tax-inclusive shipping, contact Fuuffy online support for compliance guidance tailored to your store.

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