Brexit: Duty and Tariffs on goods from EU Retailers

DeccyMarks

I'm struggling to find any information on this and from my basic understanding from news reports there wouldn't be any additional tariffs or duty on items (except alcohol and tabacco) bought/imported from the EU.

A clothing retailer (based in Italy) has started (from 1st January) to put an additional 12% on items of clothing (over the value of £135) for "Local Duty and Fees". Now this looks to be an implementation of WTO terms (ie No Deal Brexit) which impose a duty of 12% on clothing, the UK allows for goods up to the value of £135 to be duty/tariff free. I was under the impression that there wouldn't be additional fees on imports from the EU (one of the reasons for a trade deal). The government websites state 12% tariff on imports from outside the EU (but I have no idea how old the information is on gov.uk), and seems to say no additional charges for EU purchases.

Can someone add some clarity to the issue? Are these charges correct? Or is the retailer using Brexit as an excuse to pocket an extra 12% on purchases? (I've tried contacting their customer services, but have had no response).

(Please don't go into the politics of the issue, I just want to keep this focused solely on the retail question and trying to keep this politically neutral).

dlusman

Apparently there are issues to do with way VAT is charged - which results in increased costs for the retailler
https://www.bbc.co.uk/news/business-55530721

DeccyMarks

Yes I'm aware of the VAT changes (requiring businesses to have a UK VAT account), but that clearly isn't what is going on here (slightly similar due to the £135 limit), as VAT is separated out on the bill and there is a separate 12% charge labelled as "Local Duty and Tariffs".

bermudianmark

Maybe they were covering themselves in case we left the EU on WTO terms and by the time your delivery arrived duty needed to be paid.  Of course we did a deal in the end, but that wasn't known a couple of weeks ago.

DeccyMarks

Yes, that's what I'm thinking. Computer systems require testing and implementation, so someone probably implemented the 12% a few weeks ago, but still put it live even though there was a deal.

I ordered one item before they implemented the change (which is arriving tomorrow), will be interesting to see if I have to pay duty (although I thought not with the deal), but the company seems to be refusing to explain the charge that continues on their website.

Emmia

https://www.gov.uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk

If they're paying to be registered /accounting for time taken to do the VAT etc , the 12% might be their handling fee.

FYI - Gov.uk pages normally have dates of publication and updates on them.

DeccyMarks

Emmia it's not £12, it's 12%.

For example 12% on £1000 is an additional £120.

Emmia

DeccyMarks said:

Emmia it's not £12, it's 12%.

For example 12% on £1000 is an additional £120.

Clearly I misread something - but if they want to charge a fee (whether flat or percentage based), over and above the VAT/Customs type charges to account for admin etc. that is a business decision.

cpopovici2908

I have the same problem. A  12% duty was added to my purchase of clothes from Spain. Then a 20% VAT on the new value. So for a purchase of £200 I need to pay £87 custom duty and VAT. The invoice from the supplier already has a 20% VAT calculated at origin. This can't be right. DHL had paid the duty and VAT and is asking for this amount from me. I am in contact with their customs team to sort it out. In the meantime, I am not buying anything else from the EU. It's messy.

unforeseen

It sounds like there was Spanish VAT (12%) and UK VAT (20%) on it.
I wonder if its because they have to pay vat to the Spanish authorities and then also pay the UK vat? 

DeccyMarks

unforeseen said:

It sounds like there was Spanish VAT (12%) and UK VAT (20%) on it.

Spanish VAT is 21%. As far as I can see 12% tariff/duty is the default WTO amount.

The customer services I emailed just said due to "UK Regulation" these are the local duties and tariffs. I think people are coming to the realising that these charges are wrong. Most gov.uk sites are still out of date, but a calculator I did showed that nothing was due on purchases from the EU.

Essentially any company that's slapping 12% charge on top I'll avoid. There are plenty of other EU companies that are not trying to pull a fast one.