When exporting to the EU there will be no duty to pay for goods under the value of €150. VAT will be charged on items over €22 (from the 1st July this value will be €0)

The duty element will be based on the rules of origin and any Free Trade agreements that may be in place between the country of origin/manufacture and the EU.

When talking about country of origin/manufacture, we are not referring to the shipper country, but to where the items being shipped are classed as being manufactured or originated from.

VAT

There are two elements of VAT:

UK sales VAT – levied by the UK HMRC for goods sold in the UK for use/consumption in the UK

Import sales VAT – levied by the country in which the items are being bought

Goods that are sold from the UK for consumption outside of the UK are UK VAT exempt (zero rated) however will be liable for VAT by the country into which it is being exported to. From now goods now sold ex UK into the EU will not be subject to duty if valued below €150 however will be subject to in country sales VAT upon import (if over €22)

Pro Carrier offers two main choices for facilitating how the duty and tax can be managed:

1. DDU (Delivered Duty unpaid) – The recipient pays any applicable VAT and duties prior to or at the point of delivery
2. DDP (Delivered Duty Paid) – The sender pays any applicable VAT and Duty – in this case Pro Carrier will calculate the amounts due and subsequently invoice our clients. To ensure smooth progress through customs Pro Carrier will manage the in country payment of VAT and duty directly with our agents.

So, based on what our customer’s aspirations are, what they are shipping and the value of their products being shipped, Pro Carrier is perfectly positioned to provide sound advice and solutions.

We always recommend customers to seek confirmation of how best to handle VAT from their tax experts and HMRC.

From Jan 1st the threshold for material coming into the UK also disappears and importers to the UK will be responsible for making VAT returns to HMRC, therefore will have to register for VAT in the UK.

From July 2021 the €22 VAT Low Value Customs threshold into the EU will no longer be available. Please see our section on IOSS for rules on importing into the EU from that date.

At Pro Carrier we have been working hard behind the scenes to see how we can help minimise any possible disruption and mitigate any risk for our customers who already deliver into the EU. We have also thought long and hard about how we can continue to support our customers who want to expand their customer base into Europe and beyond.

How can we help?

• Technology – flexible and adaptable systems that are designed to meet the cross border administrative requirements whilst helping and facilitating our customers to meet them
• Assisting with understanding what data is required and helping our customers to be compliant
• Taking the responsibility for managing the export declaration to HMRC on behalf of our customers
• Regular communication with our customers to ensure there is clear and easy to understand information shared between all parties
• Providing support with managing VAT and Duty implications including supporting areas such as VAT drawback
• Support duty drawback and help mitigate any VAT implications when items are returned – British Returned goods
• Range of delivery services designed to support every potential customer requirement
• Mitigating risk by offering a choice of delivery networks, flexing between commercial delivery solutions and Postal delivery solutions if and when required
• Transparency of service
• Easy to understand pricing and clear invoicing

We firmly believe that Pro Carrier is equipped to take on the challenge of Brexit, utilising the systems, networks and experience we have developed and introduced specifically to make shipping cross border simple and easy.

So what does Brexit mean for the UK and for those other countries that are shipping ecommerce from outside the EU in to the one of the remaining 27 member states that make up the EU – Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden?

Today, and up to July 1st 2021, we will enjoy the advantages of the low-value and medium-value rules for imported goods, referred to as the B to C system. This means there is no liability for duty and tax for parcels being shipped to an individual if the shipment value is below 22 Euros (£15 GBP). For shipments valued above 22 Euros but below 150 Euros (£135 GBP) they are liable for VAT. Anything above 150 Euros will also incur duty charges. There are a few exceptions to these rules, such as if you are shipping alcohol, where there would be a requirement to account for excise duty.

As an ecommerce seller today you will have to register for VAT in each country where your annual sales exceeded the limit for that destination.

However the EU Tax department considers this B to C system unfair, since it puts traditional brick and mortar retailers at a disadvantage as they have to pay VAT on all imports and have to charge VAT at the point of sale. Whereas companies sending low-value orders as an online retailer cross border, there is no VAT to be considered at the point of sale.

To ensure that VAT is recognised at the right rate and that the National Tax Departments of the member states where the consignee/recipient/consumer resides are getting their VAT, the rules change on July 1st 2021. The EU recognized that buying online has become a mainstay for consumers in the EU, so the new rules whilst evening the score around VAT has also ‘simplified’ the VAT registration and payment process for online sellers retailing to individuals in the EU.