How to avoid new import fees and delivery charges buying from the EU

Like many in lockdown, Victoria Farrar decided to treat herself by splashing out on an online sale.

The 34-year-old paid £250 for a dress from upmarket French firm Sundress on January 12. 

But she was shocked by demands for an extra £99 in taxes when it was delivered a few days later.

Brexit bills: Unexpected customs charges, admin fees and VAT bills are causing chaos for shoppers ordering from EU stores 

When she asked what would happen if she refused the item, she was told she would be refunded the cost of the dress minus the £99 in taxes. Now she is stuck with a costly dress that is too big.

Miss Farrar is one of tens of thousands of internet shoppers being hit with shock charges from EU retailers since Brexit.

Unexpected customs charges, admin fees and VAT bills are causing chaos for customers, while some firms have ceased shipping until the problems are fixed.

Here, Money Mail explains the extra costs and how to avoid them . . .

Espana in the works! 

Stephen Burnby has been ordering cases of wine and spirits direct from Spain

For many years, Stephen Burnby and his wife had enjoyed having cases of European wine and spirits delivered at bargain prices.

Stephen, from Brighouse, West Yorkshire, used to order £15 bottles of brandy from online supermarket Your Spanish Corner at its retail price in Spain. 

But last week the pensioner was disappointed to find the firm’s UK deliveries have ceased. 

Meanwhile, his other favourite retailer Portugal Vineyards has told customers that one of its best-selling wines in the UK, Vidigal Porta 6, which had cost about £4.70 before Brexit, would now cost between £7 and £8.

Stephen, 70, says he will now think twice before buying from them because the deals are no better than his local supermarket.

Has VAT changed? 

New rules introduced on January 1 change the way VAT is collected on purchases from the EU.

For those over £135, tax is now collected at the point of delivery, rather than at the point of sale. 

Previously VAT would have been included at the online checkout, but now customers are being asked to pay it on their doorstep — which can be an unexpected charge.

For goods under £135, the changes affect EU retailers with UK business worth less than £70,000 a year. Previously, these firms paid VAT in their own country, but now they must register for UK VAT.

But some firms are still unaware of the rules and shoppers have reported being asked to pay VAT twice, at the point of sale and delivery. HMRC insists these demands have been made in error by the couriers.

Online marketplaces such as Amazon or eBay deal with the VAT.

The Government says the new rules ensure goods from EU and non-EU countries are ‘treated in the same way’ and UK businesses ‘are not disadvantaged by competition from VAT-free imports’.

VAT change: For purchases over £135, tax is now collected at the point of delivery, rather than at the point of sale

What about customs duties? 

Before Brexit, goods could move freely between the UK and the EU without import taxes. 

Now, for goods costing more than £135, customs duties may apply, which can range from 0 per cent to 25 per cent.

And any extras? 

Couriers have started charging additional ‘handling fees’ to shoppers to cover admin costs and extra customs checks.

Royal Mail, for example, is charging an £8 fee. DHL charges 2.5 per cent of the amount paid to clear customs with a minimum fee of £11.

Mastercard is also imposing a five-fold rise in fees for Britons buying from EU retailers using a credit or debit card.

It is likely to push up the price of everything bought online, from a pair of Italian shoes to holiday costs such as hotel stays or car hire and theme park tickets.

The fee will be imposed on EU businesses and it is up to them to decide how to pass it on. Interchange fees are capped by the EU in member states, but this protection no longer applies to the UK.

Is this fair? 

Consumer experts have warned that when handling fees are charged as a percentage they rarely reflect the additional work involved. Credit card charges may be excessive, but banks are expected to pocket the increase.

Shoppers are also angry that firms are not being open about the new charges, which make purchases unaffordable.

Miss Farrar says: ‘European companies really need to be mindful of their British customers post-Brexit. 

‘They need to be transparent about the added cost and not try and tuck them away in the small print or the backlash will be harmful for any future business and damaging to the unassuming consumer.’

What about the alcohol? 

Retailers have warned that a £12 bottle of wine bought from the EU could cost up to £1.50 extra.

How have firms responded? 

Some specialist EU retailers have said they will no longer deliver to the UK because of the changes. 

Experts predict that the situation will improve over the next few months as more EU retailers register with the taxman.

Are fraudsters cashing in? 

Internet and mobile phone providers are warning customers that scammers will exploit the confusion. Some shoppers have already reported dodgy texts and emails about customs charges.

[email protected]

This post first appeared on Dailymail.co.uk