The VAT IOSS scheme is intended to simplify VAT administration for businesses that sell low-value goods from outside the EU and Northern Ireland into the EU and Northern Ireland. The scheme is explained in more detail in an earlier article. For the avoidance of doubt, Great Britain (England, Scotland and Wales) is outside the EU and Northern Ireland.

In a significant change to the scheme, intermediary registrations will be available from 1 April 2026. This article provides a summary of the key points and provides links to detailed guidance from HMRC. 

Who can use the VAT IOSS scheme?

To use the scheme, it must be the case that the goods:

• are located in a country outside the EU and Northern Ireland at the point of sale;
• have a consignment value of £135 or less; and
• are sold to a consumer in the EU or Northern Ireland.

Several exceptions and restrictions apply, including that the VAT IOSS scheme cannot be used for consignments that include excise goods, eg, alcohol and tobacco products.

Where the business sells low value goods through an online marketplace only, the online marketplace is responsible for reporting and paying any VAT due.

How businesses can register

Registration for the VAT IOSS scheme is voluntary. Businesses in Northern Ireland or Norway can choose to register for the scheme directly. However, businesses in countries outside the EU and Northern Ireland must appoint an intermediary to register and act on their behalf if they choose to use the scheme. 

If the business chooses not to use the VAT IOSS scheme, they should follow:

• the guidance on GOV.UK, where the customer is in the UK; or
• the VAT rules of the EU country where the goods are being sold. 

If a business has already registered for the VAT IOSS scheme directly with HMRC or in an EU country and they want to register with an intermediary, they will need to first cancel their existing registration.

The role of the intermediary

The intermediary is responsible for completing the business’ VAT IOSS registration and for managing the reporting and payment of VAT due to HMRC on the business’ behalf. The business and the intermediary are ‘jointly and severally’ liable for any IOSS VAT debts from the date that the business registers and the intermediary begins to act under the scheme.

How intermediaries can register

To act as a VAT IOSS intermediary, the intermediary will first need to register for the scheme itself. To register with HMRC, the intermediary must be registered for UK VAT and have a business address in Northern Ireland. 

It is not possible to have more than one VAT IOSS intermediary registration at a time. If the intermediary is already registered as an intermediary for the VAT IOSS scheme in an EU country, they’ll need to cancel their registration in that country before applying with HMRC.

Registration to act as an intermediary will be available from 1 April 2026. HMRC’s guidance sets out the information that will be needed to register. Once they are registered as an intermediary, they will need to register their clients. HMRC’s guidance also sets out the information that the client will need to provide. 

Once the process is complete, the business will receive its unique 12-digit IOSS VAT identification number.

Using an intermediary

From the date that the business receives its identification number it must:

• charge the customer VAT at the rate applying to the goods in the EU member state of the customer, or UK VAT where the customer is in Northern Ireland, at the point of sale;
• include the identification number on the customs declaration for each consignment of imported goods; and
• keep records of all eligible sales under the scheme.

The business should:

• give their intermediary the information they need to complete and submit a monthly IOSS VAT return on their behalf; and
• pay their intermediary the total amount of VAT due on the monthly IOSS VAT return to allow them to make the monthly payment to HMRC.