Shoppers warned about post-Brexit hidden VAT charges
In the busy shopping period in the run-up to Christmas, HM Revenue & Customs (HMRC) has issued a warning to consumers to be aware of unexpected charges as a result of Brexit.
The tax authority has said that changes introduced on 1 January 2021 mean that consumers may need to pay extra charges, including import VAT when buying goods from suppliers in the EU.
To minimise potential charges, shoppers based in Great Britain should check if their order contains goods subject to excise duties, typically alcohol and perfume.
Shoppers should also be aware that if their order amounts to more than £135, excluding costs such as shipping and insurance, Customs duty may apply.
The amount due will depend on a range of factors, including shipping costs so, to avoid surprises, consumers should check with the seller.
Shoppers who already know they will need to pay import VAT should make sure their seller does not also charge them VAT, otherwise, they may be charged twice.
New rules also apply to presents being sent overseas or where a person receives a gift from abroad. Under post-Brexit legislation, if a gift is valued at less than £39 and it does not contain excise goods, it will be exempt from import VAT and customs duty.
Above this amount and import VAT may be due, with gifts worth more than £135 also subject to customs duty.
If you are planning on sending a gift to someone based overseas, you should check the guidance published by the relevant customs authority to check their specific rules and charges.
To help shoppers navigate these changes, HMRC has produced diagrams outlining fictional scenarios about buying goods from the EU and published a simple guide on GOV.UK.
If you or someone you know has been affected by the new complex import VAT rules, please speak to our team today.