Beware extra charges on online orders (as they may be arriving from the EU)

Prior to the start of this year, when the UK was following EU rules, if you ordered something from the EU then the price you saw was generally 'all-in' – so aside from delivery costs you shouldn't have faced any extra charges on top.

Now, if the consignment (total order as outlined above) is over £135, then extra charges may kick in because of the new rules – and it's here where shoppers have been caught out. There are three main types of extra charges you may face:

• Customs duty – eg, 10%-12% on bags and shoes. Customs duty is a tax on goods coming into Britain. It isn't charged on transactions between different EU countries, so while the UK was still part of the EU (and during the post-Brexit transition) it didn't apply.
  
  Now though, you will usually have to pay duty on orders over £135, though the exact amount can vary significantly. It may be a percentage of the value of the order, but in other cases it may be based on the weight of the item, sometimes in combination with a percentage.
  
  While you’ll pay customs duty on most items, some items attract no customs duty even if their consignment value is over £135. This is due to a 'rules of origin' agreement between the UK and EU where goods that have been largely produced or manufactured in an EU country are exempt from customs. These rules are complicated though, so it's best to ask the seller if it it can tell you if customs duties apply or not. You can find more information on Gov.uk. For more info on customs duty rates, see the Gov.uk website.
  
  
• Import VAT – typically 20%, but applies to shipping and duty costs too. Previously, you were simply charged VAT at the point of purchase. But now we're no longer part of the EU, on orders over £135, instead of paying normal VAT you'll be charged 'import VAT' instead, as you're technically importing what you're buying.
  
  Like normal VAT, import VAT is typically 20%, lower on some items. But crucially you don't just pay import VAT on the cost of the goods. Instead, it's charged on the total cost of shipping the goods to the UK, ie, the price of the goods plus the cost of transportation and customs duty.
  
  There have also been some changes to the way VAT is accounted for. Prior to this year some EU companies could collect VAT in their own country, but now sellers who sell to those in England, Scotland or Wales are supposed to register for VAT in the UK and collect UK VAT at the item's rate at the point of purchase. (If you're in Northern Ireland, the 2020 rules still apply now – so you may in some cases pay VAT in the EU rather than the UK.)
  
  
• Handling fees from the courier – often £6-12. Previously, courier firms simply delivered items, but now their fees reflect the costs of the extra admin they have to do when taking items through customs. This varies by the courier the retailer uses. For example, Royal Mail charges £8, DPD £5 plus VAT. FedEx charges a fee of 2.5% of the combined customs duty and VAT charge, or £12 – whichever is greater.

While in some cases, some or all of these costs may be covered by the retailer, they will often be passed on to you as the buyer – and you may be asked to directly pay the courier when it delivers, or at the post office when picking up an item.

To give an example of how these charges can stack up... a £150 jacket bought from a European online marketplace could attract 12% customs duty (though this varies by item). That's an extra £18. With 20% import VAT charged on top of that (£33.60) and a handling charge of £8 from the courier, the total cost rises to £209.60 – which means almost £60 in extra charges.