Online shopping: do I have to pay VAT, import and handling costs?

What extra delivery fees do I have to pay post-Brexit when buying online?

Customs duties, import VAT and courier ‘handling fees’ can now be added on top of what you pay at the point of sale for items ordered online from EU-based retailers that are delivered to the UK.

How much extra you could be charged depends on the total value of your order, also known as the ‘consignment value’, it also depends on the firm you’ve bought from. The ‘consignment value’ is the price of the goods excluding shipping and handling costs.

In some cases, because delivery firms have paid shipping and import costs, you may be asked to pay fees by the couriers delivering your items. If you don’t pay you may not be able to receive your order. You can also pay the delivery fees at the Post Office if you are collecting your items.

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No extra fees on orders of £135 or less

If your order costs £135 or less when you buy online, you shouldn’t face any additional fees on top of the order price. Any VAT charges at this point should be clearly listed on the receipt or invoice and in the UK, the current VAT rate is 20%.

The only extra cost at this point is likely to be postage and packaging if this is applicable.

As the UK is no longer part of the EU’s VAT regime, the new rules require EU sellers to register with HMRC to account for VAT in order to sell to the UK. This is why some smaller online retailers paused selling to UK-based customers as it would mean accepting extra costs.

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

If your order is over £135 you have crossed the threshold of where extra customs, VAT and delivery costs can start to kick in.

New VAT rules are one of the main sources of confusion for online shoppers now that we’ve left the EU. As a member of the bloc, the price at the checkout would be the final sum you would have to pay. Now though, you may have to cough up extra fees on orders worth over £135. Some consumers have been caught out by these unexpected fees.

Some of the fees you can expect to pay are:

Customs and import duties

Custom duties are a fee placed on gifts or goods sent to the UK from outside the EU. This only becomes 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 back when receiving your purchase.

The fee can range from 0 - 25% depending on the goods you’ve bought. For example a pair of trainers has a duty of 16% applied when brought into the UK. The rules for customs duties and the amount applied vary depending on the item, and finding out how much tariffs are can be time consuming.

Customs charges should not be applied to products of EU origin, due to the ‘rules of origin’ agreement between the UK and the EU. This means that orders are customs duty exempt if products have been largely produced and manufactured in the EU. 

If you’re unsure, it’s a good idea to ask the retailer if the items you are ordering might attract any customs duties before you buy.

If you are hit with a customs duty that you think you shouldn’t have to pay, you can ask the retailer to send you an ‘origin declaration’ which sets out the proof of origin of the goods you’ve bought so you can prove that your order was made and manufactured in the EU.

Orders are customs duty exempt if products have been largely produced and manufactured in the EU.

Import VAT

Import VAT is a fee currently paid on goods sent to the UK from abroad, but instead of the normal VAT you would pay at the checkout for your items, you’ll pay ‘import VAT’ on the total cost of the item and shipping and handling costs accrued when the courier brings the purchase to the UK. The usual UK Import VAT rate is 20%. 

As these charges are added up after purchase, the total cost of ordering your items will start to increase and could leave you with unexpected fees on items you’ve bought online.

Courier 'handling fees'

The new rules have also hit delivery firms and couriers have brought in ‘handling fees’ which are used to cover the extra admin costs they’re having to deal with when taking items through customs. 

These fees vary depending on which delivery service you use.

It's worth checking what the courier firms' fees are, and making sure you're happy to pay them, before going ahead with your purchase.

Your rights to reject unexpected costs and what happens if something goes wrong

You can refuse to pay the unexpected extra charges but you won’t be able to collect the items unless you do so. If the item isn’t returned you won’t be entitled to a refund for the product.

If you return the item the retailer should refund you the cost of the item.

You can make a return but you might have to pay to collect the items and then pay again to return them. If you want to make a return, you’ll need to complete a customs declaration form, CN22 or CN23, which has to include the item’s description, weight and value. The customs charge is paid for by the recipient upon delivery.

Should something go wrong with your order then Section 75 of the Consumer Credit Act will apply for purchases made on a credit card.

If your item was bought online you have consumer returns rights under the Consumer Contracts Regulations. You have the right to cancel at any time from the moment you place your online order, and up to 14 days from the day you receive your goods.

• You can read more on your rights when returning something bought online here.

Can I reclaim delivery costs and import fees?

Customs duty and import VAT on goods are repayable if you think you’ve been overcharged on delivery for an item. If this is the case you can apply to reclaim the money. Unfortunately it is unlikely you will be able to reclaim courier handling fees or the cost of sending the item back if you’ve paid to collect it.

If you have decided to pay to collect your items but wish to return the item at your own expense, the retailer you bought from should refund you the full amount for the items. You can then fill out customs forms to claim back import VAT and customs duties. 

Seeking a refund on the VAT and import charges paid may be difficult though. To claim a refund on customs duties for goods that you have returned you’ll need to fill out different customs forms based on the courier that delivered your items:

• You can use form BOR 286 to reclaim import VAT and customs duties if your items were delivered by Royal Mail or Parcelforce.
• For other couriers you can use form C285.

In some cases sellers will pre-pay customs charges which means you might not get a full refund if you decide to return your purchase. This is because prepaid customs charges are harder and take longer for the retailers to recoup. In this scenario you can still return the item and make a claim using the forms above but it is worth talking to the retailer you bought from to see if they can try and reclaim the charge for you. 

Getting a refund on a faulty or unwanted item

Buying something online that didn’t turn out as expected is covered by the Consumer Contracts Regulations, which allows you to cancel your order within 14 days if you don’t want it. You then have a further 14 days to return the goods to the retailer before getting a refund. 

You’re also covered under the Consumer Rights Act if you receive a faulty item you bought online. You get a 30 day right to reject the faulty product and get a full refund where the retailer should cover the cost of the return. After the first 30-day period you have to give the retailer the opportunity to repair or replace any faulty goods.

If you received a faulty item you must fill out and submit the relevant customs form, in this case C1179, which can help you reclaim customs charges and import VAT on faulty products.

If you bought a faulty item online and paid with a credit card, Section 75 still applies for purchases made from overseas websites. This means you can claim money back from your credit card provider if an EU based retailer you bought from is in breach of contract, for example by providing faulty goods.

• You can find out more about your rights when returning goods bought online in our online returns guide.

Rules for sending gifts to or from the UK

The rules also apply to sending or receiving gifts from the EU. Like items you’ve bought online, the person receiving the gift is liable for the delivery costs upon receipt.  

Like the ‘consignment value’ for items bought online, value thresholds for customs duty and import VAT also apply for gifts. In some instances the rules mean you could end up paying more in delivery charges and customs fees then you might have if you ordered the item yourself online.

The rules applied all come down to the value of the items, but for gifts the threshold is £39 before fees kick in:

• If the value of the gift is £39 or less - import VAT, customs duty and handling fees should not apply. 
• Between £39 and £135 - the 20% rate of import VAT applies to the total cost of the item and shipping. As you’re paying import VAT you may also have to pay courier handling fees but you won’t have to pay customs duty as the gift’s value is below the £135 threshold for items. 
• Over £135 - at this point customs duty will kick in in addition to import VAT and courier handling fees. The same as if you bought the item(s) yourself.

If you are sending gifts (or any other items) to Europe or elsewhere, you will have to attach customs declaration forms to anything you have sent. This is the same as returning an unwanted product. Letters, postcards and documents are exempt.

The customs forms you have to use when sending items abroad differ depending on the value of what you are sending. Royal Mail requires a different customs declaration form depending on whether the value of what you are sending is above or below £270

• Below £270 you have to fill in and attach a CN22 form.
• Above £270 you have to fill in and attach a CN23 form.

Rules for Northern Ireland based shoppers

The rules differ for online shoppers based in Northern Ireland due to the country’s unique position in the EU’s single market.

Shopping between Northern Ireland and the EU remains more or less unchanged. Rules for import VAT and customs duties are much the same as they were before Brexit. However, with the new rules and regulations, some retailers based in the UK have stopped sales to Northern Ireland due to the paperwork delays at ports.

If you’re sending items between Northern Ireland and Great Britain you won’t need to fill out customs declarations as Northern Ireland remains in the UK’s customs territory. This also applies for sending goods from Northern Ireland to the EU. This means you shouldn’t face any additional customs fees, VAT or courier handling fees when sending or receiving goods between NI and the UK or to the EU.