March 7, 2021

Brexit fees: Why is my online shopping so expensive?

Written by Tom Eddington
BBC News

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Some shoppers have found that purchases from EU stores are getting more expensive.

Not all fees are covered by a Brexit trade agreement between the UK and the EU.

What are these fees and how can they be avoided?

I want to buy a 50 jumper from the EU, what do I need to know?

Value Added Tax (VAT), sales tax, is always required for EU goods.

Since Brexit, the method by which it is used has changed.

Previously, you would have paid the local VAT rate.

So, if you bought your jumper from a store in Sweden, for example, you would have paid Swedish VAT.

Now, you pay UK VAT, which is 20%.

For anything under $ 135, VAT should automatically be part of the final price you pay on an online renewal.

What if my jumper costs more than $ 135?

Most items above $ 135 now have to be paid on UK VAT delivery time – which is no longer included in the online renewal.

So if you bought a very expensive jumper from an EU seller, the distribution company will now ask you to pay VAT before it is delivered to you.

This can be a shock if the retailer does not make this clear before you buy.

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Martin Shaw, a partner at law firm Simmons & Simmons, says you should check your invoice to make sure the retailer’s systems are working properly and that you have not been charged twice.

What if I buy from an online marketplace?

Retailers will now be charged UK VAT when listing their products on online markets such as Amazon, eBay or Etsy.

So the cost may increase when you place it in a UK delivery address.

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Are there any other charges I need to know?

Custom tax applies to items worth more than Custom 135.

You do not have to pay customs duty if your expensive jumper is made in the EU and is fully manufactured.

But the EU seller will have to pay customs duty if he first imports from a non-EU country.

The same fee applies if a certain percentage of the materials used to make the jumper come from outside the EU (known as the same terms).

You can contact the retailer before you make a purchase to ask if you have to pay customs duty.

If you have to pay, the delivery company will send you an invoice.

How much will I pay extra?

There is no customs duty on some things.

“Custom obligations can be as low as 1.7%,” says Anna Zerzevska, founder of Trade and Boundaries Consulting.

“But textiles, food and drink can be high.

“Very few are over 20%.”

Knitted cotton pullover has a 12% custom duty charge.

Prior to Brexit, it was first paid for by an EU importer.

And it could have been transferred to any other EU country – including the UK – at no extra charge.

I am charged an administrative fee, what is it?

Delivery options and fees should be listed on the retailer’s website.

Can I still buy clothes in different sizes and send back what I don’t like?

If you return what you bought, you can get back any obligations Completion of Form C285 from HM Revenue and Customs.

What if I receive a gift from the EU?

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Any gift worth more than 39 from outside the UK is subject to VAT.

If a friend buys a gift directly from a German retailer and asks you to send it to you in the UK, the courier will ask you to pay any VAT or customs duty.

If your friend sends a gift from a local post office, they will also need to fill out a customs form.

But the sender of the gift may ask the seller or shipping company if they can pay the advance – called obligations – to avoid the embarrassing situation where you have to pay to receive their gift.