An unfortunate side-effect of the UK leaving the European Union has been that the rules being applied to import duty from EU to UK after Brexit have changed.
That means an increase in the amount of money you’ll be spending to get shipments from the EU — based on a range of factors such as the cost of the item on order, and the vendor you’re buying from.
In some instances, you might also receive a message from the courier service handling your shipping asking you to settle an import VAT or customs duty charge.
While most people already understand the basics, internet message boards are rife with questions about the various specifics of these rules. So, we’ve put together this quick guide to fill in the blanks — explaining things like when you’ll need to pay, and what your rights are if you’ve been overcharged or want to return a purchase.
Import duty from EU to UK after Brexit: The bad news
Since the UK went its separate way, we’ve seen many stories of disgruntled shoppers, furious at having been landed with unexpected Brexit-related shipping costs. These horror stories have been growing year on year, with some people paying in excess of £100 on top of their purchase price. Furthermore, many have been left feeling somewhat surprised after being asked to pay for these additional costs — while at the same time not getting told what these charges were actually for.
Many are claiming that they’ve had to pay more than is actually owed, while others report that it’s been altogether impossible to calculate what they’ve been invoiced for is really the correct amount. Additionally, many are complaining that additional fees on import duty from EU to UK after Brexit are also being applied to their courier service based on the ‘consignment value’ of their order.
Import duty from EU to UK after Brexit: Things to remember
All these issues stem from new rules that were introduced on 1 January 2021, the date on which the transition period expired. Since then we’ve seen increases in regards to import duty from EU to UK after Brexit, because goods arriving into the UK have been hit with additional fees based on the ‘consignment value of the goods’. This value excludes transport or insurance costs (unless they are included in the price and not shown separately on the invoice).
If your consignment value of order is less than £135 or less, you can rest assured that you’re not due to face any additional fees. Additionally, VAT is included in the purchase price you see when you checkout online. This works the same as it did before Brexit and you’ll not be expected to take on extra courier fees either.
That’s due to the fact that £135 is the threshold over which customs duty applies (excluding items such as alcohol and tobacco) and the point at which you’ll start getting charged for which point import VAT.
However on orders of £135 or below, VAT amounts may have now changed. Previously, EU enterprises with sales to the UK of less than £70K per year were able to account for VAT in their own territory. But now every EU business is obligated to account for UK VAT (unless selling to N. Ireland where the old rules still apply).
Some people have found this a little confusing, but the crucial point you should keep in mind is that you should only pay the price shown at checkout and shouldn’t be hit with any extra fees.
With order costing over £135 it’s a different story. In these cases, you’ll be expected to pay import VAT, customs duty and handling fees. When the UK was bound by EU rules, if you bought something online coming from the EU, the price you saw was the price you paid generally speaking. Now, if the total is over £135 then additional charges may apply and this is where shoppers are getting caught out with three principal types of extra charge: customs duty, Import VAT and courier handling fees.Customs duty — which might appear in the form of, say, 10%-15% on trainers and sports accessories — is a ‘consumer tax’ on goods coming into Britain. These charges aren’t applied to transactions between countries with EU membership. So, while the United Kingdom was still in the club, they didn’t apply as a rule of law.
Times have changed. Now, you’ll be typically paying customs duty on orders over £135 (although the exact amount can vary).
In some cases, it might be a portion of the purchase price of the order. In others it may be based on the item’s weight. Or, it could be a combination of both.
Some items, even if their consignment value is in excess of £135, will attract no applicable customs duty. These special cases enjoy the oversight of a ‘rules of origin’ agreement made between the UK and EU concerning types of items that are mostly produced in an EU country. If you’re uncertain, it’s a good idea to ask the seller if customs duties apply or not.Import VAT is typically 20% and also applies to shipping and duty costs as well. Prior to Brexit, shoppers enjoyed a less complicated environment where VAT was simply charged at the point of purchase. But, because the UK has since left the EU, shoppers are now charged ‘import VAT’ instead. This is because they themselves are technically importing what they’re buying.
Import VAT is usually at 20%, just like normal VAT. But, importantly you don’t just pay it on the price of your goods. You’ll also be charged on the total cost of shipping those goods to the UK.
That’s the price of the goods — and the cost of transportation plus customs duty.
When it comes to import duty from EU to UK after Brexit there’s also been a number of updates to the way VAT is accounted for. Before the UK left, some EU-based companies were able to collect VAT in their own country. Now however it’s a case of those enterprises selling in the UK having to register for VAT in the UK and then collect it at the item’s rate at the time of purchase.
Courier handling fees usually land in the £6-12 range. Prior to Brexit, courier firms would simply deliver the items to you without additional charge. But now, additional admin has forced them to reflect this with additional costs. This fee tends to vary based on the courier.
It’s easy to see how charges can get out of hand for unassuming shoppers when you consider that, say, a £200 coat purchased from an online store in the EU based might incur a 12% (for example) customs duty. That works out as an extra £24. Then, with a 20% import VAT on top of that (£40) and a handling charge of £12 from the courier, the final cost is £276!
Import duty from EU to UK after Brexit: Making things simpler
Duty Refund is your number one resource for online shoppers who want to better navigate the post-Brexit world. Whether you’ve got further questions about import duty from EU to UK after Brexit, or anything regarding customs and taxes on items bought online, we’re here to help. It’s our mission to help UK customers shop with complete confidence — safe in the knowledge that, should a purchase not work out and needs to be returned, they have recourse to claim back any additional duty applied to their shipping.
Our service is quick, easy and simple to use. It enables you to overcome all the obstacles usually associated with pursuing these kinds of refunds, and calculate duty costs applied to items before you’ve even bought them.