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Duty for shipments from Europe to UK post Brexit

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Written by Ecoparcel March 19, 2021

Many people sending parcels between Europe and the UK, as well as business owners doing trade in these routes feared that the implementation of Brexit rules could turn things for the worst.

As the first months of 2021 have already come to an end, it seems that such worries were not without reason as both businessmen and regular people have voiced their frustration over the new taxation system as well as additional customs duty required for shipments coming from the EU.

Even though a new trade deal was agreed upon since last Christmas, the transition to a post-Brexit world has been difficult for many britons.

In this article, we will talk about how casual parcels as well as businesses were affected by the new rules.

What are the general rules that came into effect for UK residents?

Changes apply for both, exported and imported goods between Europe and the UK.

What exact rules apply depend on a few factors according to the UK government. This includes the country that they are being shipped to or are coming from, what goods are in question and of course, the overall value of the item.

As you may already know, since the 1st of January, new rules for VAT were introduced, which means that the tax is being collected at the time of the sale, rather than the moment they're being imported.

The UK government expects retailers that want to send goods to the UK to register for UK VAT and account for it to Revenue and Customs.

Such a change meant that many retailers are unwilling to continue to make deliveries to the UK, as the tax duty is just too much.

Effects of parcels shipments

The last-December signed deal between the UK and EU means that goods exchanged between both countries are exempt from quotas and tariffs, however, that does not mean an exemption from new taxes.

As we've already mentioned, since the start of new year, the UK is no longer a part of the EU's VAT regime. As such, the UK government is now applying a 20% VAT tax rate for goods, including parcels coming from the EU.

This rule applies for shipments that are less than £135, however, if items are more valuable than that, the procedure is slightly different. Instead of the VAT being applied at the time of purchase, the tax is generated at the time of import.

Another important thing to know for buyers is the country of origin rule. Let's say you want to purchase a wallet from a seller in Italy. This doesn't necessarily mean that the wallets themselves were manufactured in the country, and could have originated from somewhere else.

So, if you're considering buying something more expensive, be mindful that additional charges for customs may apply.

Of course, some retail giants like Ebay and Amazon have already included automatic application of the tax, so you don't need to worry yourself with that.

All in all

In this article we've given a brief summary of the current situation with shipments between the UK and EU. It's fair to say that many businesses were affected heavily by the new rules and many small retailers were caught completely off guard.

It will take some time for people to adjust, but it looks like parcel shipments will be different from now on.