Your money or your parcel
What you need to know about the new EU-UK shipping taxes
By Melissa on February 2, 2021
The Brexit transition period officially ended on 31 December 2020. The new rules and regulations that came in place since — particularly around parcels and deliveries — have caught many of us off-guard.
Buyers who’ve purchased from the EU and vice versa are being hit with unexpected fees upon delivery of their packages. Couriers are showing up at doorsteps demanding, in some cases, more than £100 in import duties. And in Europe, clients are also being asked to pay customs tariffs, handling fees and VAT to receive their parcels.
While it's still quite the bureaucratic headache, we've gathered advice and information on what you need to know when shopping online for items shipped between the UK and the EU after Brexit.
First, what are the fees?
The UK government has outlined tax and duty information for goods sent from abroad, including EU countries, following Brexit.
A 20% UK VAT now applies to almost everything from the EU, including gifts, second-hand items and Amazon/eBay products bought from private sellers. Gifts over £39 will come with the UK sales tax, and if it’s over £135, custom duties will also apply if the goods 'originate' from outside the UK and EU, which can be as much as 25%. The UK VAT can be collected at the time of purchase if it’s under £135. Still, it'll be due at the time of delivery or at the point of entry if it's over this limit.
For fee information on the reverse scenario (i.e., ordering from the UK to the EU), we suggest visiting your particular country’s government website before purchasing for details on any applicable sales tax and custom tariffs for imported items from the UK.
Additionally, some courier firms may charge an additional fee to cover extra handling costs. This could be a flat fee or a small percentage of the total price of your item.
Here are just a few examples of the costs you could be paying:
Buying a £150 jacket from France
- You'll be charged VAT of £30 (20% of £150) at time of delivery (i.e., on the doorstep) or when the good arrives in the UK
- You may also have pay up to 25% in custom duties if parts of the jacket originate from outside of the UK or EU, which could be as much as £37.50
- The courier firm may charge a fee
Buying a £50 homeware gift from Italy
- You'll be charged VAT of £10 (20% of £50) at point of sale
- VAT gift exemption only applies to items worth £39 or less
- The courier firm may charge a fee
Buying a £35 second hand pair of jeans from an eBay seller in Germany
- You'll be charged VAT of £7 (20% of £35) at point of sale
- The courier firm may charge a fee
Tips before buying
Here are the top things you need to know the next time you plan on ordering something from the UK or EU now that the Brexit transition period has come to an end.
Do your research
While it’s common for online retailers to have a localised website, you’ll need to do some digging beyond the homepage to find out where the items you want to purchase are actually located and coming from.
In some instances, people browsing a localised UK website thought they were buying their items from the UK but in fact, were coming from Europe. Hence, to their surprise, they were subject to the new shipping fees. The same is true for EU buyers who thought they were purchasing items from within the EU because they bought from an EU version of a retailer’s site with prices displayed in euros, but in fact was a UK company with items shipped from the UK.
Watch out for foreign exchange fees
Some EU-based retailers may only transact in euros (and vice-versa, if you're based in the EU and shopping in the UK). If so, you could end up paying any VAT or custom fees in euros (or vice-versa), which might result in foreign exchange and/or bank charges. Avoid this by paying in your local currency where you can, or use your Monese EUR/GBP account to pay for your orders. With your Monese multi-currency account, you can send money instantly to and from your GBP and EUR accounts at great exchange rates.
Read the terms and conditions
Online shops like Amazon and eBay have stated that they’ll start to charge the VAT at the time of purchase for orders to the UK and vice versa. But you'll still need to be careful when ordering from other shops online as not all have implemented this tactic yet.
You’ll be required to pay up before receiving any packages. Even if you reject the box because you refuse to pay the new extra charges, firms are changing their terms and conditions. Some state you're liable for the supplementary costs, regardless of whether you reject and return the parcel. So read the fine print before buying.
At the same time, make sure you have a clear understanding of the return, refund, exchange and order cancellation policies before buying any items.
Keep your receipts
If you know you’ve already been charged the full VAT at the time of purchase, don’t pay it again if a courier demands it. Show proof of payment on your receipt (like on your order confirmation email) and reject the parcel. Then, contact the company and explain they didn’t declare the VAT properly and you were unable to receive your item.
Pick up in-store
One way to avoid any extra charges upon delivery to your home could be to pick up your purchases in-store. This is an option if the retailer has physical stores in your country.
Know your rights
If you’re in the UK, your consumer rights will be unchanged following Brexit, even when shopping in the EU. However, any disputes around hidden costs and the like can no longer be settled in UK courts. Instead, it’ll have to be resolved in the courts of the country where the seller is located, making it more challenging. Likewise, your EU consumer protection legislation may no longer apply in the UK if you’ve bought something from a UK business and an issue arises.
If you want to return an item later on, be aware that some additional charges may apply if you’re sending something back to the EU or vice versa.
Be vigilant of scams
Fraudsters are taking advantage of all the confusion and uncertainty and targeting recipients with SMS messages asking them to pay for the release of parcels, etc. Double-check any messages and don’t click on links you’re suspicious or unsure of. If you’re not sure about fees you’re being charged, it’s best to call the courier company using an official number to verify the charges and what you owe.
Suppose you truly want to avoid the hassle of these new taxes and customs charges. In that case, it's best to avoid shopping from abroad at all — at least until things iron themselves out, which could be a while as businesses get used to the new rules. If you’re in the EU, shop locally or from other EU countries, and if you’re in the UK, buy from shops you’re sure are UK retailers.
Are you still buying from other countries post-Brexit? What issues have you encountered while shopping online from retailers abroad? Let us know on Facebook, Twitter, Instagram or email us at email@example.com.