What should I buy in the UK?

Buying on the island: The pitfalls of Brexit in online shopping

Anyone who orders a lot on the Internet knows how much anticipation the approaching delivery date will bring. If the parcel comes from England, the messenger has recently often come with a bill - often so juicy that the joy goes by.

This is what happened to Sabrina S., who ordered tea on the Internet. From London, the capital of the tea-drinking country Great Britain, which recently left the European Union. Including the shipping costs, S. paid a little more than 60 euros. She did not know that the parcel carrier would demand almost 34 euros in import sales tax (EUSt) from her when handing over the delivery. The delivery service also charged a fee for processing. The bottom line was that S. spent more than 100 euros. She had reckoned with just over 60.

Like S., many consumers in Austria have been feeling since the Brexit transition phase and the deal negotiated at the last minute is provisionally in force. The Brexit negotiators were able to prevent tariffs from being introduced on British products. However, there have been import barriers since January 1st. In many online shops you can only find out if you go through the small print.

No more customs union

Since the beginning of the year, imports from the UK - with the exception of Northern Ireland - have been subject to import sales tax. Anyone who orders goods worth more than 150 euros from the island should also pay close attention to their origin. Because only products that are largely manufactured in Great Britain are duty-free. Anyone who buys a Chinese vacuum robot from a British online retailer, for example, has to expect customs duties.

The fact that Sabrina S. had to shell out almost half of the purchase price in import tax is not due to an exorbitantly high tax rate. The customs office charges 20 percent of the customs value for imports by post. What many do not know: The customs value is not always the same as the price a product costs in the online shop.

Hidden costs

Who, like S., orders a packet of tea from London is buying more than just dried leaves. The tea is packaged and shipped, the delivery possibly insured. The assessment base for the import tax also depends on where the product was manufactured. Imports from all third countries that cost less than 22 euros are exempt from VAT - but only until July 1st.

All kinds of costs can therefore play a role in the customs value, freight costs are offset, at customs proportionally up to the EU border; for import tax to the delivery address. If the authorities set high freight costs, as with Sabrina S., this drives up the tax liability. In any case, experts recommend researching all possible costs before buying. It is also worth checking with the customs office if the costs charged seem implausibly high.

Delivery service collects customs

The customs authorities determine the amount of the duties. Parcel carriers only become customs collectors at the front door, because the delivery services advance the duties for their customers at the customs office.

For delivery services like the post office, Brexit means more paperwork at the border. But there is no fear of a greater overall effort than before. Lastly, around 500 packets per day came to Austria, but in future the Post expects a maximum of 400 per day. A Post spokesman assures that shipments were recently backed up at the British border but had nothing to do with Brexit. The latest traffic restrictions due to the pandemic are to blame for the sometimes massive delays in deliveries.

Even at DHL Express, which delivers parcels worldwide, there are no concerns about Brexit-related business restrictions. A spokesman for the company says they have prepared for all possible scenarios - including a hard Brexit without a deal. The same applies to traders on both sides of the English Channel, they say. However, there have recently also been reports from parcel service providers - such as DPD - that have stopped deliveries from Great Britain to the EU at short notice.

The Austrian customs authority, on the other hand, expects the workload for online trading to increase by around 25 percent. The finance ministry says that the resources have already been increased. One promises, however, an early relief through EU-wide digital platforms, via which the consignments of goods can be processed centrally.

Expensive returns

And how do consumers see Brexit? You don't get such quality in Austria, says tea lover S., who warmly recommends her London tea supplier. But she also thinks customers should be better informed about the cost of trading online with the island.

The Ministry of Finance recommends that you get very detailed information on its website. The goods should be bought at the net price, otherwise you will pay double tax. You should definitely refuse to accept damaged goods. Because even if the online retailer accepts returns: The import tax is not refunded. (Aloysius Widmann, January 14, 2021)