Prices of goods from UK will go up from January 1; Goods above €22 will be subject to VAT and customs duties

Last updated Dec 10, 2020

DUBLIN: Those who purchase goods from the UK after January 1 will have to pay VAT and customs duties. While this is adverse to customers, it is expected that the government’s tax revenue will increase significantly. Revenue explained the costs which consumers will face after Brexit. Goods below €22 will not be subject to any import charges. But those priced above €22 will have to pay VAT in addition to shipping, delivery, insurance and handling charges.

If the price is more than €150, customers will have to pay not only VAT but also customs duty. Retailers or the authorities who bring it here will be obliged to pay these charges. Sports goods worth up to €65 will not be subject to customs duty but will be liable for VAT. This would increase the price by €13.65. In addition to delivery, the price will increase to €78.65.

If the price of sports goods is more than €150, the charges will also increase significantly. An item valued at €167 costs €20.04 in customs duty and €39.28 in VAT. That item will cost a total of €226.32 – about €60 more. As the price goes up, a 12% customs duty will be levied on various bands. So an item valued at €167 will face customs duty as follows,12% of €97+12% of €40+ 12% of €15 which is €20.04. Revenue also states that these rates may vary depending on the terms of the Free Trade Agreement.

21% flat VAT will be applicable on all goods above €22. But the duty rate will vary depending on the purchase.

New EU e-commerce rules will also apply after July 1

The new EU e-commerce rules will take effect after July 1 next year. All purchases below €22 from non-EU online sellers are subject to VAT. If the UK-based seller does not charge customs and VAT, delivery companies must pay the charges here before delivery.

The imposition of VAT and customs duties on goods imported from the UK will result in huge revenue collection. Last year Revenue applied taxes and duties to 100,000 parcels. It brought seven million euros to the treasury.

Irish customers make up 70% of their online purchases from the UK. Therefore, the number of parcels subject to tax and duty is expected to increase significantly in 2021.

But it remains to be seen whether consumers will continue to buy from the UK as additional rates apply. The Competition and Consumer Protection Commission warns consumers to be aware of changes in consumer rights when the UK leaves the EU.