After Brexit, purchasing or importing goods between the UK and the EU has become more complex. If you frequently order items from EU countries or run a business that imports goods into the UK, understanding how to avoid customs charges for EU and UK trade is essential.
This guide from Numbersmith explains how to legally minimise or avoid customs charges, including import VAT, customs duties, and excise duties, while ensuring full compliance with His Majesty's Revenue and Customs (HMRC) regulations. From understanding customs declarations to mastering commodity codes, we've got everything you need to know.
What Are Customs Charges and Why Are They Applied?
When goods move across international borders, governments often impose taxes or duties on them. In the context of UK-EU trade, three main types of charges may apply:
Customs Duties
These are tariffs imposed on imported goods. The rate depends on the product's commodity code and country of origin.
Import VAT
This is Value Added Tax (currently 20%) charged on the total value of goods, including the price paid, shipping, and insurance costs.
Excise Duty
This applies to excise goods like alcohol and tobacco products. Items such as hand-rolling tobacco and spirits attract high duty rates and require specific UK health warnings and UK duty stamps.
How Brexit Changed Customs for EU to UK Shipments
Before Brexit, the UK and EU operated within a customs union. Goods moved freely without tariffs or VAT implications. Since January 2021, however, the UK has been treated as a third country, meaning all goods from EU countries are subject to customs processes.
Here are key post-Brexit changes:
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All shipments must include a customs declaration
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VAT and duties apply based on item value and type
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Northern Ireland operates under different rules due to the Windsor Framework (formerly the Northern Ireland Protocol)
Understanding the Role of UK Customs
UK customs authorities oversee the import and export of goods, ensuring compliance with taxation, health, and safety standards.
Customs Declaration
Every import requires an accurate customs declaration, including:
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Description of goods
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Value and currency (e.g., pounds, euros, Swiss francs)
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Commodity code
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Country of origin
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Invoice or commercial document
Customs Clearance
Before goods are released, they must undergo customs clearance. Any mistakes in documentation may delay delivery or result in penalties.
Common Items That Incur Customs Charges
Not all items are treated equally. Here are common categories that often incur UK customs charges:
Alcohol and Tobacco Products
These are highly regulated and taxed. You must:
Animal Products and Restricted Goods
Meat, dairy, and some animal-based items may be prohibited or require extra documentation due to health risks.
How to Calculate Customs Charges
Customs charges are calculated based on the total value of the goods, including:
Commodity Codes and Duty Rates
Every product must be classified using a commodity code, which determines the duty rate. These are found on the UK Government Trade Tariff website.
Commercial Value and Price Paid
Under-declaring the value to save on tax is illegal. Always declare the actual purchase price to avoid fines.
De Minimis Thresholds
The UK has specific thresholds below which certain charges don't apply. Currently, gifts under £39 may be exempt from VAT and duties, while commercial goods under £135 are subject to VAT collection at the point of sale.
Strategies to Avoid or Reduce Customs Charges
While you can't avoid all charges, there are legal ways to reduce them.
Shop from UK Retailers or UK-based sellers
Whenever possible, buy from sellers who ship from within the UK. Many EU sellers now stock UK-based inventory to bypass customs.
Use Gift Exemptions Legally
Gifts worth less than £39 (not purchased goods) sent from an individual in the EU may be exempt from VAT and duties. The gift must be:
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Sent from a private individual (not a business)
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Genuinely a gift with no payment involved
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Below the threshold value
Split Orders Wisely
Large orders may exceed value thresholds. If possible, split purchases into smaller consignments to stay below tax limits. However, artificial splitting should be avoided to evade duties, as this may be considered tax avoidance.
Consider ATA Carnets for Temporary Imports
For temporary imports (exhibitions, samples, professional equipment), ATA Carnets allow duty-free temporary admission. This is particularly useful for businesses.
Explore Duty Suspension Schemes
Certain business imports may qualify for duty suspension or relief schemes, particularly for raw materials used in manufacturing.
How Courier Companies Handle Customs
Royal Mail Process
If your parcel arrives via Royal Mail, they will:
Private Couriers: DHL, UPS, FedEx
These companies typically handle customs clearance and may charge a handling fee in addition to VAT and duty. Key points:
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They often advance duty payments and bill you later
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Handling fees can range from £8 to £25
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Read the terms and conditions carefully
The Role of Shipping and Insurance Costs
Shipping and insurance costs are added to the item value when calculating import VAT. Choosing cheaper delivery methods may help reduce the total charges, but ensure adequate insurance coverage.
Customs Rules for Northern Ireland
Northern Ireland is subject to different customs rules under the Windsor Framework:
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Goods from the EU to Northern Ireland moving in free circulation aren't subject to tariffs
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Northern Ireland follows EU rules for goods regulations
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Import VAT rules may differ from the rest of the UK
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Businesses should consult the latest UK Government guidance on Northern Ireland trade
How to Track and Pay UK Import Duty
Using the Reference Number
Your courier or Royal Mail will send a payment request with a reference number. You'll need this to pay duties online or by phone.
HMRC Payment Portals
You can pay via:
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HMRC Customs Duty Payment Portal
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Courier websites (DHL, UPS, etc.)
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Royal Mail online payment system
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Phone payments with the reference number
Keep receipts and tracking information for disputes or refunds.
What to Do If You're Overcharged
Requesting Refunds
If you've paid duties in error:
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Contact the courier or HMRC immediately
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Provide proof of value and evidence of overcharge
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Submit a refund request form with supporting documentation
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Keep all original receipts and correspondence
Disputing Charges with Customs Authorities
You can dispute charges if you believe:
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The wrong commodity code was used
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The item value was miscalculated
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The item qualifies for an exemption or relief
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You were charged handling fees incorrectly
Tips for Businesses Importing from the EU to the UK
Ensure Accurate Documentation
Businesses must provide:
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Detailed commercial invoices
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Correct commodity codes
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Proof of origin certificates
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Any required licenses or permits
Choose the Right Incoterms
These determine who is responsible for customs fees:
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DDP (Delivered Duty Paid) – Seller pays all customs charges
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DAP (Delivered at Place) – Buyer pays customs charges
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Ex Works (EXW) – Buyer handles all shipping and customs
Use DDP to reduce friction for UK buyers, but factor customs costs into your pricing.
Consider Becoming an Authorised Economic Operator (AEO)
AEO status can provide:
Frequently Asked Questions
1. Can I avoid UK customs charges on gifts from the EU?
Yes, if the gift is under £39 and meets specific criteria. The gift must be sent from an individual (not a business) and be genuinely a gift with no payment involved.
2. Do I have to pay VAT on items under £135?
For goods under £135, VAT is typically charged at the point of sale if the seller is registered for UK VAT. If not, you'll pay VAT plus a handling fee upon import.
3. Are shipping costs included in customs charge calculations?
Yes, both shipping and insurance costs are added to the product price when calculating import VAT and duties.
4. What happens if I refuse to pay customs charges?
Your parcel will be returned to the sender or destroyed after a holding period. You may also incur return shipping fees.
5. Do I pay customs duty twice if I return an item to the EU and receive a replacement?
Not necessarily. Keep all documentation. If it's a genuine exchange or repair under warranty, you may be able to claim relief from duplicate charges.
6. How can I check what charges will apply before buying?
Use the UK Trade Tariff Tool at gov.uk/trade-tariff to check duty rates by product type and country of origin before making purchases.
7. Can I use temporary admission for equipment I'm bringing temporarily to the UK?
Yes, ATA Carnets allow temporary duty-free admission for professional equipment, samples, and exhibition goods. This must be arranged before travel.
Conclusion
Understanding how to avoid customs charges for EU and UK shipments can save you money, time, and stress. With Brexit changing the rules, it's more important than ever to stay informed, use accurate documentation, and work with reliable couriers and partners.
By applying the strategies outlined here – from using gift exemptions and splitting orders to choosing the right Incoterms and exploring duty suspension schemes – you'll be better equipped to manage your imports and stay compliant with UK customs regulations.
For tailored advice on managing customs and VAT obligations, speak to our Ecommerce Accountants UK specialists.
Partner with Numbersmith
Looking to streamline your international shipping or business imports? Numbersmith offers expert guidance on UK customs, VAT, and international shipping processes. Contact us today to avoid unnecessary customs charges and keep your business moving efficiently and compliantly.
Important Disclaimer: This guide provides general information based on current understanding of UK customs regulations. Rules, rates, and thresholds can change frequently. For the most up-to-date and accurate information, always check the official UK Government websites at gov.uk/trade-tariff and gov.uk/topic/business-tax/import-export, or consult with HMRC directly. This information should not be considered as professional tax or legal advice.