Amazon are demanding that all merchants offer delivery duty paid to EU customers. This means that now the UK transition agreement has expired and there is a new trade agreement, if your products are not covered by free trade then when sold on Amazon you must deliver to your customer without them receiving an invoice for duty or VAT.
“Having buyers pay duties is in violation of the Amazon Marketplace policies and can lead to the suspension of your seller account.”
Royal Mail EU Delivery Duty Paid from Feb 2021
From the 1st of January 2021 all sales from the UK to EU customers will be treated as exports. These can be zero rated for UK VAT purposes, as currently applied for non-EU countries. But, items depending on their value and nature, may become liable to import VAT (and customs duty where applicable) when entering the EU.
Royal Mail’s services are normally delivered Delivered Duties Unpaid (DDU), where the overseas post or parcel operator will collect the import VAT (and customs duty) from the EU buyer prior to delivery, alongside a handing fee. This is against Amazon policy.
Royal Mail will be launching a Delivered Duties Paid (‘DDP’) range of solutions covering untracked and fully tracked services. They published the rate card for this service today. This service will allow the UK merchants to calculate and collect from their customer at the checkout an additional amount that will cover the cost of import VAT and customs duty alongside the DDP handling fee. This will help to avoid unexpected charges and delivery delays to the end recipient, improving the overall customer experience.
The alternative from shipping from the UK is of course to rely on Amazon FBA. However in this case you will be responsible for shipping your items to an Amazon warehouse located within the EU and pay duty when the good enter the EU.
The initial roll out will be from February 2021 for Royal Mail Tracked and Signed service.
In addition to the above, from the 1st of January 2021 customs authorities in the EU will apply customs, excise and VAT procedures to goods from the UK, in the same way that they do now for goods received from outside of the EU.
Until the 1st of July 2021 consignments with a value not exceeding €22 are relieved from import VAT and customs duty in most EU countries. This is called the Low Value Consignment Relief (‘LVCR’). Some member states have adopted a €10 or an even lower or nil threshold (e.g. in France it’s €1 and in Sweden it’s SEK 0).
On the 1st of July 2021 the EU is set to remove the LVCR entirely. The implication of this is that from this date every single UK to EU item, regardless of value, will attract VAT (and customs duty where applicable). The rate of VAT varies by country and will be payable at the rate applicable in the recipient’s country. The good news for marketplace sellers is that also from the 1st of July the marketplaces will be responsible for collecting VAT on most sales from merchants outside of the EU, removing your responsibility for charging and remitting VAT. However this won’t solve the duty part of the puzzle so you’ll still need a delivery duty paid service.
Royal Mail International Business Parcels – Delivery duty paid to the EU Tracked & Signed Services
Effective 18 January 2021