You need to adjust the limit screws on your rear derailleur. YouTube is your friend here.
Spacer is not required.
The limit screws are adjusted correctly—the chain catches between the sprocket and chainstay with the current 12t sprocket on there. This wasn't a problem when I had an 11t sprocket on there.
A spacer on the DS is possible, but it would mess up the dishing of your wheel. Worth checking if there's a spacer between the cassette and hub.
@bens0n started
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You need to adjust the limit screws on your rear derailleur. YouTube is your friend here.
Spacer is not required.