Online shopping: do I have to pay VAT, import and handling costs? - Which? (2023)

What additional post-Brexit delivery fees will I have to pay if I buy online?

Customs duties, import sales tax and courier handling fees can now be added to what you pay at the point of sale for items ordered online from EU retailers that are delivered to the UK.

How much more you may be charged depends on the total amount of your order, also known as the "shipping amount" and also the company you purchased it from. The "delivery value" is the price of the goods excluding shipping and packaging costs.

In some cases, you may be asked to pay fees for the couriers who deliver your items, as delivery companies have covered shipping and import costs. If you do not pay, you may not receive your order. You can also pay the delivery fees at the post office pickup when you collect your items.

• To shed light on what Brexit means for shopping, finance, holidays and more, read ourBrexit adviceto make sure you don't get caught.

No extra costs on orders £135 or less

If your order is £135 or less when purchased online, you should incur no additional charges on top of the order price. Any VAT charges at this point must be clearly stated on the receipt or invoice and in the UK the current VAT rate is 20%.

The only additional costs at this point are probably postage and packaging, if any.

As the UK is no longer part of the EU VAT system, the new rules will require EU sellers to register with HMRC to account for VAT to sell in the UK. As a result, some smaller online retailers have suspended sales to UK customers as this would have meant additional costs.

Import VAT, customs fees and handling fees for orders over £135

If your order exceeds £135, you have exceeded the threshold where additional fees, VAT and delivery charges may apply.

The new VAT rules are one of the main sources of confusion for online shoppers after we left the EU. As a block member, the price at checkout would be the final total you would have to pay. However, you may now have to pay additional fees for orders over £135. Some consumers have been taken aback by these unexpected fees.

Simon Potthast, musician and producer, ordered a £603 software and hardware package from music producer Ableton for the job. When the package arrived at the UK port of entry, he received an email from UPS that import duties of £112.55 were due.

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Some of the fees you can expect are:

import taxes and duties

Customs duty is a fee levied on gifts or goods sent to the UK from outside the EU. This is only payable if your order is over £135. The courier will pay this to HMRC on your behalf, but you will likely have to pay this when you receive your purchase.

The fee can vary from 0% to 25% depending on the products purchased. For example, a pair of sneakers will incur a 16% tax when imported into the UK. Rules for taxes and amounts applied vary by item andFind out what the rates areit can be time consuming.

Due to the Rules of Origin Agreement between the UK and the EU, no customs duty is to be levied on products originating in the EU. This means that orders are tax free if the products are predominantly produced and manufactured in the EU.

If you're not sure, it's a good idea to ask the retailer before buying if the items you're buying may be subject to customs duties.

If you come across a customs duty that you feel you shouldn't pay, ask the retailer to send you a "Declaration of Origin" detailing the customs dutiesproof of originof the goods you have purchased so that you can prove that your order is made and manufactured in the EU.

Orders are tax free if the products are mainly produced and manufactured in the EU.

import sales tax

Import VAT is a charge that is currently payable on goods shipped from overseas to the UK, but instead of the normal VAT you would pay on your items at checkout, you pay 'import VAT' on the full cost of the item and postage handling fees incurred if the courier takes the purchase to the UK. The standard UK import sales tax rate is 20%.

As these charges add up after purchase, the total cost of ordering your items starts to add up, and you may experience unexpected charges for items purchased online.

Mail 'handling fees'

The new rules have also hit delivery companies, and the post office has started charging "handling fees" to cover the extra administrative costs they have to deal with when moving items through customs. These fees vary depending on the delivery service you use.

Use our table below to find out the rates for each courier. Each post office has its own policy regarding charges. It's worth checking the policy with your courier before paying if you feel you are being overcharged.

In all, a £150 pair of sneakers will incur 16% customs duty (£24) and 20% import sales tax fixed at the UK rate (£30, £54 in total), but say your order will be delivered by Royal Mail who also charge a 'handling charge' of £8, the delivery charge for the sneakers is £62. The total cost you may have to pay is £212.

Your right to refuse unexpected charges and what happens if something goes wrong

You can refuse to pay the unexpected additional charges, but you will not be able to collect the items unless you do so. If the item is not returned, you are not entitled to a refund for the product.

If you return the item, the retailer must reimburse you for the cost of the item.

You can make a return, but you may have to pay to collect the items and then pay again to return them. If you wish to make a return, you must complete a customs declaration form,CN22 or CN23, which should include the item's description, weight, and value. The customs fee is paid by the recipient at the time of delivery.

If something goes wrong with your order§ 75 Consumer Credit ActApplies to all purchases made with a credit card.

If your item was purchased online, you have consumer return rights under the Consumer Contracts Regulations. You have the right of withdrawal at any time from the time you place your order online and up to 14 days after you receive your products.

• you can continue readingYour rights when returning an item purchased online here.

Can I claim delivery costs and import fees?

Customs duties and sales tax for importing goods are recoverable if you feel you have been overcharged for delivering an item. In that case, you can request a refund. Unfortunately, you are unlikely to be able to recoup the courier's handling fees or the cost of returning the item once you've paid for collection.

If you have chosen to pay to collect your items but wish to return them at your own expense, the retailer you purchased them from must refund you in full for the items. You can then complete customs forms to recover VAT and import duties.

However, it can be difficult to claim a refund of VAT and import duties paid. To claim a refund of customs duties on the goods you are returning, you will need to complete different customs forms depending on the courier who delivered your items:

• You can use the formMUST 286Recover VAT and import duties if your items were delivered by Royal Mail or Parcelforce.
• For other couriers, you can use the formC285.

In some cases, sellers prepay customs fees, which means you may not receive a full refund if you decide to return your purchase. This is because prepaid customs duties are more difficult and take longer for retailers to recover. In this scenario, you can still return the item and file a claim using the forms above, but it's worth speaking to the retailer you bought it from to see if they can try to charge you the fee to get them back.

Get a refund for a defective or unwanted item

Buying something online that didn't go as expected falls under the Consumer Contracts Regulation, which allows you to cancel your order within 14 days if you don't want to. You then have an additional 14 days to return the goods to the retailer before receiving a refund.

They are also covered byConsumer Protection Lawif you receive a defective item that you purchased online. You have a 30-day right to refuse the defective product and receive a full refund, although the cost of return shipping will be borne by the retailer. After the first 30 days, you must provide the retailer with an opportunity to repair or replace defective products.

In that case, if you have received a defective item, you must complete and submit the appropriate customs formC1179, which can help you recover customs duty and import sales tax for defective products.

If you purchased a defective item online and paid by credit card,Section 75of the Consumer Credit Law still applies to purchases made on foreign websites. This means you can claim a refund from your credit card provider if an EU retailer you purchased from is non-compliant, for example. B. for delivery of defective goods.

• You can find out more about your rights when returning goods purchased online at ourOnline Returns Guide.

Rules for sending gifts to or from the UK

The rules also apply to sending or receiving gifts from the EU. As with items purchased online, shipping costs are the responsibility of the recipient upon receipt.

As with "shipping value" for online purchases, value limits for customs and import sales tax also apply to gifts. In some cases, the rules mean you could end up paying more shipping and customs fees than if you ordered the item online.

Any rules applied depend on the value of the items, but for gifts the limit is £39 before charge:

• If the value of the gift is £39 or less- Import sales tax, customs fees and handling fees shall not apply.
• Between £39 and £135- A 20% import sales tax fee applies to the total cost of the item and shipping. When paying import VAT, you may also need to pay courier service fees, but you don't have to pay customs fees as the gift value is under the £135 item limit.
• Over £135- At this time, customs fees in addition to import sales tax and courier handling fees will apply. Same as if you bought the items yourself.

If you are shipping gifts (or any other items) to Europe or elsewhere, you must include customs declaration forms with everything you ship. This is the same as returning an unwanted product. Letters, postcards and certificates are excluded.

The customs forms you need to use when shipping items internationally differ depending on the amount of your shipment. Royal Mail requires a different customs declaration form depending on whether your item is worth more or less than £270

• Under £270You must complete and attach aCN22-Form.
• Over £270You must complete and attach aCN23-Form.

Rules for Northern Ireland Buyers

Different rules apply to online shoppers based in Northern Ireland due to the country's unique position in the EU's single market.

Purchases between Northern Ireland and the EU remain more or less unchanged. The rules for import VAT and customs duties are basically the same as before Brexit. With the new rules and regulations, however, some UK retailers have stopped selling to Northern Ireland due to paperwork delays at ports.

If you areShipments between Northern Ireland and Great BritainYou do not need to complete any customs declarations as Northern Ireland remains within UK customs territory. This also applies when shipping goods from Northern Ireland to the EU. This means that you must not incur any additional taxes, VAT or courier charges when sending or receiving goods between NI and the UK or EU.

Experiencehow Brexit affects your consumer rightsreading our guide.