EU website purchases: the import charges UK customers have to pay

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Before Brexit, UK consumers were free to buy items from anywhere in the EU without incurring import duties and other charges. That all changed on 1 January 2021.

Online orders up to £135 are now supposed to have the UK’s prevailing VAT rate added at the point of sale by the EU retailer, which has to have registered with HM Revenue & Customs.

Lots of smaller EU-based retailers have decided that the paperwork of collecting UK VAT is not worth the hassle and as a result will no longer supply UK consumers.

Other EU retailers appear to have carried on as before, and have been sending out orders without having deducted the VAT. This has led to couriers turning up on doorsteps demanding the UK buyer pay the VAT owed on the item they are receiving. The rate will be between 0% and 20% depending on the item.

Anyone in the UK receiving a gift from the EU worth more than £39 will now face a bill for import VAT at 20%.

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Items below £135 bought through the big online marketplaces such as Amazon will have had UK VAT added and therefore can be delivered in the UK with no extra charges demanded.

For orders above £135 it is more complicated as they also attract import duty, which can range from 0% to 25% of the item’s value depending on what it is, what material it is made from and its declared value. There are thousands of different rates of duty and the system is difficult to navigate. Clothes typically attract a 12% customs duty, but it’s hard to generalise.

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VAT is then added to the total – at the prevailing UK rate, which for most adult items is 20%. The couriers also add their admin charge of between £8 (Royal Mail) and £11.50 (UPS), or 2.5% of the amount paid to clear customs, with a minimum charge of £11 (DHL).

For example, a £200 coat bought from a German website could attract 12% or £24 customs duty. VAT at 20% is then applied to the total of £224, giving a VAT bill of £44.80. Once the courier has added its £11.50 admin fee, the UK consumer must pay £80.30 to the courier on the doorstep before it will hand over the item – adding around 40% to the coat’s price.

Orders made before 1 January should not attract these charges.