We've bought a couple of things from the EU recently. Our understanding/experience is below... but massive caveat that this was all done based on some hasty internet research before buying so is probably full of mistakes...
If the value of the entire shipment (regardless of number of in items and possibly including shipping costs, not sure) is under euro150 / GBP135, no customs charges apply. Then,
- if the retailer is registered with HMRC for VAT then the retailer collects a 20% surcharge from you, which it then sends directly to HMRC as UK VAT, and the item arrives with no bother at all (in this case, some shoes from Hardloop in France that were euro80). The retailer does not need to pay VAT in their own country, so does not lose out. (I updated this to clarify 'surcharge' vs actual VAT, see atz comment below)
- if the retailer is not registered with HMRC or if the item is shipped without documentation showing that UK VAT is paid, then ??? you might get stung at customs for UK VAT and pay VAT twice? or admin hassle.
If the shipment value is over £135, then charges apply and you are responsible for paying UK VAT. However the retailer should discount the item by their own VAT rate.
- customs charges, not 100% sure about this but they vary a lot depending on the item. We were buying skis, this table suggests the charge is about 2%, and the resulting charge was about that, but not exactly?! https://www.trade-tariff.service.gov.uk/headings/9506
- an admin charge from the courier, Royal Mail quote £8, the skis arrived with DPD and I think it was about £10
UK VAT -
you have to pay 20% on the total of the item cost AND the above charges. However, the retailer should not charge you their own VAT which in France/Germany is currently 20%/19% so it roughly balances out. Watch out that you don't pay both VAT charges, though:
- if the retailer clearly knocks off their own VAT (eg you can see a before and after price at checkout) then this is good
- if the retailer does not clearly knock off their own VAT, then watch out, you might end up paying it twice. In theory you can claim it back from the retailer. In practice this might be an admin nightmare. The above rule about <£135 purchases means that some retailers might be confused about whether and when or not to knock it off?
We bought ski stuff from Sport Conrad and Telemark Pyrenees and both of these clearly knocked off the VAT at checkout. There was then an email from the courier as part of the tracking link, which went to a form to pay the UK VAT, customs and admin charges. When the courier arrived, he had no evidence of this on his handheld device, but was happy to see a printout of the online receipts from the courier and PayPal.
We did a rough calculation before buying along the lines of -
The skis were on sale for euro300
Knock off 20% VAT = 300 / 1.2 = euro 250
With pricey ski shipping = euro 275
About £237 pounds
Add 2% and admin charge of £10 = £252
Add 20% UK VAT = £302
I think it did end up slightly pricier than that, but in the end was close enough. Tijs corrected my VAT calcs so in the end I think this calculation was about right
Which leads to a nice rule of thumb that at the current exchange rate the euro price (with VAT) ends up being roughly the GBP price you'll pay after all the phaff. Actually I think the ski shipping cost distorts this. Plus exchange rates might vary. So prob best not rely on this rule of thumb, just work it out if needed?
If any of the above is wrong or anyone can clarify anything, I would be glad to know... so far not put off shopping in the EU but not exactly cracking on with confidence either, I think I'll still buy with caution from shops that seem to say all the right things and even more caution from shops where it is not clear (eg no UK VAT number for <£135 or not obviously discounting VAT for >£135).
Update - A couple of other scenarios - this all possibly goes away if:
1 - you buy from a marketplace. They have different rules and are able to collect UK VAT for all items regardless of cost. Ebay and Amazon qualify for this. So buying from them from the EU should be fine, but I have no experience of this...
2 - the EU company has a UK subsidiary and can import your >£135 shipment via that. In which case their web site can possibly charge you UK VAT up front (as atz said, probably as a surcharge rather than strictly VAT) and then sort out all the paperwork and VAT for you. It has been in the news that UK companies are doing this to export to the EU via new EU subsidiaries, so maybe we might see more of this in reverse?
Maybe we need a forum list of known good transactions, which will hopefully grow as the various retailers figure it out?
- hardloop.fr, shipment < £135, arrived promptly (3 days) with no customs hassle
- Sport Conrad, shipment > £135, they knocked off the EU VAT and customs process with DPD was straightforward and ~1 week
- Telemark Pyrenees, shipment > £135, they knocked off the EU VAT and the customs process with DPD was straightforward and ~1 week