New post-Brexit VAT and Customs Duties rules 2021

We have had so many calls and emails from our customers in the EU asking about the new post-Brexit VAT and Customs Duties rules, that we thought it would be useful to put together a small guide to help people make sense of the new regime.

New post-Brexit VAT and Customs Duties rules 2021
Photo by Matthis Volquardsen from Pexels

If you are a consumer…

Say, you live in Germany (or any other member state of the EU) and you are buying online a 5 megapixel Hikvision CCTV camera for your new house in Potsdam. The camera costs on our website £100 (+20% VAT), but because your shipping address is outside the UK, you will not have to pay the 20% UK VAT. So the total price that you pay to us is £100 (plus any shipment cost).

However, when your order gets delivered to your local depot in Germany, you would receive a message from your postal service operator advising you that you have to pay the German (19%) VAT on the purchase price of the imported Hikvision camera. So the total cost to you would be the £100 that you paid to us when you placed your order online PLUS the £19 (in Euro equivalent) of the German 19% VAT.

The other thing that you should be aware of though is that, whilst there should be Customs Duties, there is still requirement to prepare and submit a customs declaration, which normally the courier company would do on your behalf. Unfortunately, most courier companies charge a fee for doing so, which again you would receive a bill for. This would typically be anything from EUR 10 – EUR 35 depending on the shipping company.

To sum up, the total cost for you would be: £100 (no UK VAT) + £19 (German VAT) + Service fee £10 = £129

If you are a VAT-registered business…

If you are buying as a VAT-registered business, then you would still normally be required to pay your local VAT but, unlike a consumer customer, you may be able to recover the paid VAT on your next VAT return. So the actual cost to you (using the same example) would be just £110 and not £129 if you had been a German consumer client – this also assumes that you are not preparing your own customs declarations.

Hopefully it clarifies the things a bit! If you have any specific queries – please do not hesitate to get in touch.

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