VAT Impacts for Customers in the EU and UK

TL;DR

  • If you wish to place an order to within the EU, shipping via DHL with pre-paid customs fees, duty and VAT then you are unaffected by the new VAT regulations

  • If you're shipping to the UK, or wish to pay customs fees, duty and VAT yourself (at delivery) or use a service other than DHL, then you must order at least $200.00 in products

  • Our European web shop is now open and fulfilling orders from within the European Union, at www.americanduchess.eu

VAT treatment of overseas goods shipped to the EU and UK have changed

From 1st January 2021, HMRC introduced a new model for the VAT treatment of goods arriving into Great Britain from overseas. This is intended to ensure that goods originating in the UK, EU and non-EU countries are treated in the same way.

From 1st July 2021, the EU introduced a very similar model, primarily designed to reduce VAT fraud and ensure all due VAT revenue is collected before delivery.

For orders under £135 or €150, the new regulations require overseas vendors to register for an IOSS and/or a VAT number, file VAT returns, and make payments to to HMRC or IOSS directly from a UK or EU bank account, respectively.

As a company that is registered in the USA this essentially requires us to create entirely new operating companies in the both the UK and EU. Orders over £135 are not subject to those requirements.

 

    Our new $200 minimum order value for shipments, with delivery duty unpaid (DDU) shipping

    Unfortunately, as a small company in a niche market we simply do not have the resources to manage this new regulatory burden and the  administrative overhead that it introduces. Hiring additional resource to manage  this new requirement is not a viable option due to the small size of the EU and UK markets in proportion to the rest of our business.

    Rather than refuse sales to residents of the EU and UK entirely, by shipping only orders with a value of more than €150 (or £135) we are able to avoid the additional operating costs of having to maintain multiple business entities in the UK and EU in addition to our US company. 

    As long as this trade barrier remains in place, all orders that are shipping to the EU or UK must have a value of at least $200 before shipping costs, so that they may be processed under the standard WTO rules (as previously).
     

    Shipments via DHL delivery duty paid (DDP) to within the EU are unaffected by these changes

    If you select DHL as the shipping service, where duty and VAT is paid up front (DDP) then this will be submitted by DHL directly, and you may purchase goods valuing less than $200.

    You can read more about our international shipping options, and the difference between the DDU and DDP shipping services on our international orders page.

    We are aware that $200 is a little higher than €150 (or £135), but with fluctuating currency conversion rates this gives us a little wiggle room to play with rather than have to adjust the threshold on a constant basis - as our eCommerce platform is unable to to apply a block on order values for any currency other than USD.

    As has always been the case, our goods are sold without including sales tax and. Please be aware that you should expect to pay VAT, duty and a customs processing fee before you may take receipt of your shipment.

    We now offer a "Delivery Duty Paid" (DDP) shipping option via DHL, allowing you to pay the VAT, duty and customs brokerage fees during checkout - so no further fees will be due at the point of delivery.

    We appreciate your continued support, patience, and understanding in this matter.