Support IOSS on Letter Format Shipments
Small items of value that are sold by small businesses in the UK (through platforms such as Etsy) and sent to the EU have to be posted as a large letter in order to meet IOSS rules because Royal Mail does not print IOSS on a letter sized envelope.
Printing IOSS on a letter would save EU customers who have paid VAT at the point of ordering from paying VAT once again on receipt of the package This is more expensive than it needs to be for both parties because items such as a greeting card, a small pack of stickers, an iron on patch and more are perfectly ok to fit in a letter sized envelope. In a cost of living crisis it seems unnecessary to force a higher postage cost. Items sent to other parts of the world such as the US can be sent as a letter.
Thanks for your suggestion. Royal Mail made changes in 2019 to reflect the Universal Postal Union requirements regarding items of Non-Personal Correspondence (NPC), ie Goods. Many countries only accept NPC as Parcel format and wherever possible Royal Mail has retained an up to Large Letter format. IOSS, and other pre-registered VAT Schemes, are available for all NPC products and ‘letter-sized’ goods may be sent on these services. All goods must be sent on NPC services as they require full electronic Customs Data and electronically processed Customs Declarations.
If we accept that Royal Mail simply does not agree that IOSS needs to be implemented on letter format packets, the issue is that the website is simply misleading.
They need to remove the IOSS as an "enhancement" against the shipping options for letter format, and make it clearer that IOSS is NOT support for letter format.
At the moment, the only way of spotting this (apart from reading the forum) is that the printed label does not have the IOSS icon on it - no explanation why. If you edit the contents, you can also see the IOSS field is missing but the way it displays looks more like a visual HTML error than the fact the field is not supported.
I see that this is still an issue. When adding items you can enter your IOSS number, but at no point is there a warning that letter format shipments do not support IOSS.
The EU tax authorities still expect to collect VAT on the item, so I do not understand why Royal Mail support it on Large Letters, but not Letter rate.
I sell flat computer parts which fit nicely in a letter rate envelope - but now the lesson is learned and I will have to increase my postal costs to EU customers to ensure that they are paying for sending items large letter (albeit in a letter envelope)
Katia Hinic commented
Why not? Are you not planning to do this at all, even in the future?
I can see no other reason, than forcing people the use a large letter, even though they don't need it. Which is not a nice way to do business.
Milly's Cameras commented
Rosie, Royal Mail are exploiting IOSS by choosing not to support it via Click n Drop. They can not refuse you, putting some form of notification showing IOSS has been paid on the letter sized envelope.
Royal Mail may choose to not support IOSS for letter class postage and try to nudge its customers into buying a more expensive postage class. But the fact is, EU customs do support this letter class to show the IOSS paid status.
I now use the IOSS stickers available from post office counters over the top of the Click and Drop purchased letter label. All my letters now arrive fine.
Katia Hinic commented
I sell small items (stickers, cards, small drawings etc.) via Etsy marketplace, which I have integrated with the Click&Drop system. Most of these items fit in a small letter.
When I sell to the EU, the IOSS number is automatically applied to these orders, however the IOSS is not supported when sending a small letter. This resulted in customers getting taxed twice (or applied customs charges).
I spoke to Click&Drop helpline and they said this is not supported (and that they're following guidelines), but what I don't understand is why. There's no reason not to have this exempt from the IOSS system, seeing you can easily sell items that just happen to be small enough to fit a normal letter.
It's almost impossible to send such items without incurring extra cost to EU customers, which in turn means loss of business.
I was advised to buy the large letter / small parcel, which supports the IOSS system, but the postage is much more expensive - sometimes several time more expensive than the item I sold. It is just not commercially viable or reasonable.
Surely this is a relatively small adjustment to make, seeing this system is already in place with other categories of letters / parcels?