Jan 22, 2021
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British shoppers hit with extra charges due to Brexit

Jan 22, 2021

The early cost of Brexit has begun to filter through to UK consumers' pockets and goods are increasingly being returned to EU-based online retailers due to unexpected costs.

Picture: courtesy Pexels

Increased red tape at customs borders means British customers are facing demands to pay up to a third extra to release their goods from bonded warehouses once they arrive in the UK, a report by The Times claims.

That means thousands of online shoppers are now being hit with extra customs, VAT and delivery charges on orders from the EU.

Customers also say they’re not being advised at checkout about any extra costs. Many are refusing to pay, forcing delivery companies to return the items, the report says.

It cites courier firm DPD asking one shopper to pay £77 in tax and charges to release £245 of clothes bought from the Sandro webstore that's based in France.

New rules require VAT on purchases from the EU to be collected at the point of delivery for goods costing over £135.

In many cases retailers are unaware of the rules. In some cases customers may be paying VAT at both the local rate at the point of sale and the UK rate at the point of delivery, the report claims.

It said many EU retailers haven't registered with the UK tax authorities and some shoppers have also reported being asked to pay VAT for delivery of lower-value items.

HMRC insists that these demands have been made in error by the courier companies, but that doesn't help consumers who are being asked to pay up and it's a problem for retailers dealing with returns.

Delivery firms are also adding their own charges to cover the administration costs of collecting the taxes. 

A government spokesman told The Times: “The new VAT model ensures... that UK businesses are not disadvantaged by competition from VAT-free imports". But that response seemed to fly in the face of the reality on the ground.

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