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Deliveries from the EU after Brexit: What import fees, VAT and delivery charges do I have to pay?
With Brexit impacting delivery charges, many are being hit with a surprise bill when they receive items ordered from outside the UK. So, is there a way to avoid import tax and handling fees? In this guide, we explain how Brexit has impacted shipping and what new charges you can expect to face.
What problem are UK shoppers facing post-Brexit?
Before the Brexit changes on January 1st 2021, UK consumers could buy items from the EU without ever having to pay customs duty and VAT. However, this has since changed and now shoppers are being faced with extra charges and increased postage costs when buying from the EU.
The BBC has highlighted this problem including one case where a lady was asked to pay an extra £82 for the £200 coat she ordered from Europe. This was all due to customs, VAT and handling fees.
The Latest Deals members have also noticed some changes to delivery from the EU post-Brexit:
I like to order food and snacks from around the world and on Amazon they have the Candy Planet store and before Brexit all boxes were included with prime. Now they are still the same price not on prime and have an additional £2.99 delivery cost per box!
Yes, I have a colleague living and working in the south of France and he always buys his material from the UK but he now says it's cheaper to buy it all store in the UK then pick up on his way home.
What are the post-Brexit EU delivery charges?
Internet shoppers are being hit with unexpected customs charges, handling fees and VAT bills when they order something from outside the UK. The chaos is so stressful for shoppers that some companies have stopped UK shipping until the problems are resolved.
So, why has Britain's exit from the EU impacted the cost of buying goods from abroad? What extra costs can you expect and can you avoid them?
Buying from sellers outside the UK - Will receiving items from Europe cost more?
Post-Brexit, three different charges can be applied to purchases outside of the UK. These include:
- Customs charges
- Handling fees
Let’s take a look at what you can expect from each of these charges:
Has VAT changed post-Brexit?
From January 1st 2021, new Brexit rules have changed the way that VAT is collected on purchases from the EU. For orders over £135, you no longer pay for VAT charges from the EU at checkout. Instead, you’ll be expected to pay these charges on your doorstep at the point of delivery. This can be an unexpected charge for many.
For orders of £135 and below, the VAT will be charged by the seller at the point of sale. This will be a 20% VAT charge. The difference here is that the UK supplies the VAT, rather than import VAT. This means that these companies must now register for UK VAT. This is the seller’s responsibility to charge. This has put many companies off selling to the UK due to complications.
However, if you’re receiving a gift from the EU over £39, you could also be charged VAT up to 20% at the point of delivery. Items like alcohol, tobacco or perfume less than £135 will also be subject to import tax and customs duty.
What’s causing even more confusion is that some EU companies aren’t fully aware of these changes. This means that some customers are being charged VAT twice - at the online checkout and at the point of delivery.
Large online retailers such as Amazon are dealing with the VAT.
The Government says these new rules ensure that EU and non-EU countries are “treated in the same way”. This also means that UK businesses “are not disadvantaged by competition from VAT-free imports”.
The Government explains the VAT changes here. Please be aware that these rules could be subject to change or updates.
Will I have to pay customs duty for EU purchases?
Before the post-Brexit changes on January 1st, goods could move freely between the UK and EU without any import taxes. This has since changed. For goods over £135, customs duties might apply. These charges can range from 0-25% of the cost of the goods.
You might also be charged customs on items like alcohol, tobacco and perfume from the EU.
Will I be charged handling fees too?
Handling fees can also be added to items ordered from the EU. These ‘handling fees’ cover extra admin costs and customs checks that couriers will now be subject to.
These additional handling fees will be collected by the courier once the item is due to be delivered to you in the UK.
From October 15th 2021, online shoppers will be hit with a huge increase in Mastercard’s ‘interchange’ fees. In October, Mastercard will begin to charge 1.5% of the transaction value for every credit card transaction made from the UK to the EU. Currently, this ‘interchange’ fee is only 0.3%. That’s a five-fold increase!
For those who use their UK debit card to make EU purchases, this ‘interchange’ fee will jump from 0.2% to 1.15%.
These additional costs only make it harder for UK consumers to make purchases from the EU. As a result, this could potentially increase the cost of everything bought online from the EU.
What about duty-free shopping?
The Brexit deal has confirmed that people travelling between Great Britain and the EU can enjoy duty-free allowances.
When entering the EU from Great Britain travellers are allowed the following:
- Alcohol: 4 litres of wine, 16 litres of beer and 1 litre of spirits over 22%. Or 1 litre of alcohol 80% (or over). Or 2 litres of fortified or sparkling wine.
- Tobacco: 200 cigarettes or 50 cigars or 250g tobacco.
- Other goods: up to a value of €300 per traveller or €430 for travellers by plane and boat.
When entering Great Britain from the EU:
- Alcohol: 18 litres of still wine, 42 litres of beer and 4 litres of spirits over 22%. Or 9 litres of fortified wine, sparkling wine and alcoholic drinks up to 22%.
- Tobacco: 200 cigarettes or 50 cigars or 250g tobacco or 200 sticks of tobacco for heating.
- Other goods: worth up to £390 (or up to £270 when arriving by private plane or boat).
Three days before you’re due to arrive in the UK, you can use the government’s online service to check whether you’ve used up your allowance. If you’ve gone over your allowance, you need to make a declaration and pay duty/tax.
Your goods could be seized if you’re over your personal allowance and haven’t declared them.
So, what about Northern Ireland? When travelling from an EU country into Northern Ireland, the Government website states that: “you do not need to declare or pay tax or duty on any goods you bring into Northern Ireland from the EU”. This only applies as long as you’re transporting the goods yourself, will use them for personal use or gift them and have paid tax and duty in the country you bought them from.
What changes have the main UK delivery companies made post-Brexit?
Each delivery company has a different process for implementing the changes when shipping parcels from the EU to the UK. Let’s take a look at some of the charges from the most popular UK couriers:
The Royal Mail is charging an £8 handling fee for EU orders. The Royal Mail will collect VAT, customs and handling fees on items before delivery. The amount you’ll be charged for customs and VAT depends on the cost of the item being delivered.
You’ll receive a Fee to Pay card prior to your item being delivered.
You’ll be charged customs duty and tax on items over £135 ordered from the EU. You’ll also be charged what DPD calls an ‘administration fee’ of £5 plus VAT.
Before receiving your delivery from the EU, you’ll receive a text from DPD requesting the money with a link to a payment platform. DPD will provide you with a 14-digit parcel number within this text. You can then verify this parcel is genuine by entering the parcel number online along with your postcode. Make sure you do this before paying to avoid fraudsters.
DHL will charge a handling fee of 2.5% of the amount paid to clear customs, with a minimum charge of £11. Standard customs duty and VAT will also apply to EU orders over £135.
Hermes have stated that they won’t be able to let customers know what the handling fees, VAT and customs duty charges will be in advance. This means a surprise bill when ordering from the EU could be likely.
Parcel Force has stated that customers receiving items from the EU will need to pay VAT, duties and additional fees before they can receive the parcel. The charges depend on the value of the item and whether it’s a gift or commercial.
Again, the cost of handling fees isn’t mentioned, so it might be a surprise.
Your consumer rights - Are these extra charges fair?
Shoppers aren’t very happy with the new changes when buying from the EU. Especially when these charges aren’t made clear upon purchasing the product.
Here’s how your rights could lead to complicated disputes over the new post-Brexit delivery charges:
- UK consumer rights - your consumer rights when buying online from the EU could become more complicated. VAT, customs duty and handling fees may all need to be paid before receiving your delivery. This could lead to complicated disputes requesting money back.
- Consumer Rights Act returns - the Consumer Rights Act allows online shoppers to have 14 days before returning an unwanted item. However, it might now cost you more money to send it back.
- Hidden costs - many consumers feel that these charges are ‘hidden’ and aren’t clear when they purchased an item from the EU. As a result, they don’t want to pay the extra fees but still want the item. The UK has left the EU which means disputes like this cannot be settled in UK courts. It’ll fall under the jurisdiction of the seller’s country.
How can I avoid these extra fees?
For EU items over £135, VAT isn’t charged at the checkout. Therefore, items can look much cheaper than they actually are. Some EU companies don’t make it clear at the checkout that you’ll have to pay VAT and other fees once the item is due to be delivered in the UK.
If this isn’t clear, always ask the retailer so you’re aware of what fees you might face.
The sure-fire way to avoid these extra EU postage costs is to only shop at companies who fulfil orders within the UK. You’ll need to ask the retailer directly where they fulfil their orders. Just having ‘co.uk’ in the URL doesn’t mean orders are fulfilled here.
When shopping on a foreign site, you’re charged a fee for non-sterling transactions. Try to make purchases on cards that don’t charge this fee, like a travel credit card, for example.
Can I claim a refund on an order from the EU due to the extra postage fees?
Yes, you can! UK and EU rules allow a full refund for an order made online or over the phone if you cancel and return the item within 14 days.
This refund must also include any postage charges you paid when making the purchase, including the customs and VAT. This doesn’t apply if you selected anything other than standard delivery, such as express delivery.
You may be required to pay for the return postage costs, it’s up to the company whether they agree to pay for the return delivery. If not, you'll have to pay, including any VAT and customs duty. Some companies might also charge an admin fee to process your return and refund.
Each retailer is different so make sure that you read the terms and conditions.