The two get mixed up all the time. One is EU, one is UK, and they apply to different people.
People mix up IOSS and reclaiming import VAT because both involve VAT on imported goods. They are separate. IOSS is a European Union scheme. Reclaiming import VAT is a UK rule for businesses that are registered for VAT.
IOSS stands for Import One-Stop Shop. It is an EU scheme, in use since 1 July 2021, that lets sellers collect VAT at checkout on low-value goods sent to customers inside the EU. The EU limit is €150 per consignment. It is not part of UK law, and GOV.UK guidance on VAT for goods sent to the UK does not mention it. If you are buying for delivery to the UK, IOSS is not the rule that applies to you. A UK business selling into the EU may meet it from the seller's side.
For the exact EU rules, use the European Commission's own pages. This site covers UK imports only.
For goods sent to Great Britain in a consignment worth £135 or less, the seller or the online marketplace must charge UK VAT at the point of sale. The seller has to register for UK VAT to do that. The limit applies to the whole consignment, not to each item. Above £135, normal VAT and customs rules apply when the parcel arrives, and the carrier collects import VAT and any duty from you.
If your business is registered for VAT in the UK and you import goods for use in the business, you can usually recover the import VAT as input tax, under the normal rules. There are two ways to do it:
If you are a UK trader who is not registered for VAT, you still pay import VAT but you cannot reclaim it. A private buyer has no reclaim route either. A consumer who wants a refund because they returned the goods or were overcharged uses a different process, covered in reclaiming import VAT and duty on a return.
A VAT-registered UK business buys £5,000 of stock from a supplier in China. No duty applies to the goods, so import VAT at 20% is £1,000. The business does not use IOSS, which has nothing to do with this purchase. It either postpones the £1,000 and recovers it on the same VAT return, or pays it at the border and reclaims it with the C79 as evidence. A private buyer who spends £5,000 on the same goods pays the £1,000 and gets none of it back.
A change coming: the UK Government has confirmed that the £135 customs duty relief will end by October 2028 (announced 23 June 2026). Nothing changes yet, and this page reflects today's rules. See the government's reforming customs rules for low value imports page.
Related guides: Postponed VAT accounting · Reclaiming import VAT · Buying from China · Courier fees compared
IOSS is a European Union scheme for collecting VAT at checkout on low-value goods sent into the EU. Reclaiming import VAT is a UK rule that lets a VAT-registered business recover import VAT as input tax. They are separate and apply to different situations.
No. IOSS is an EU scheme and GOV.UK guidance for goods sent to the UK does not use it. For consignments of £135 or less sent to Great Britain, the seller or marketplace charges UK VAT at the point of sale instead.
Only if you are registered for VAT in the UK and the goods are for your business, and then under the normal input tax rules. A private buyer and a trader who is not VAT-registered cannot reclaim import VAT.