Sending Goods DDP

[The Soup Dragon]

We often send goods DDP to a couple of customers in the USA. This typically goes via DHL and we pay for the shipping and get the duty bill a week or so later. We never know what that bill will be until it arrives but it typically works out at around 4%, give or take, of the value of the goods. We can work with this without any problems.

We have been looking at sending DDP to Europe as post Brexit sales have taken a nose dive but again we wont know what the duty/VAT element will be until after the goods have been sent. I am thinking that this is likely to be around 20% plus for most EU countries. Would anyone have any further insight into this? 20% would only work if we increased our prices to cover it.

 

[2JP]

Depends on value and HS classification. 20% , give or take, depending on EU country, is just the VAT. And unless you are VAT registered in that country, you cannot reclaim the VAT. However, there is no UK VAT to charge the customer if you are UK VAT registered (I assume you are in UK and shipping from UK). Duties depend on HS classification and place of manufacture, etc. In addition, a country like Spain will charge various extra 'customs' processing fees just because. Not sure if you get any 'special' fees from the courier for DDP. We do mostly B2B so go with DAP.

If the UK government had really wanted to help UK small businesses with Brexit, all the gritty details of what the different EU countries charge with imports and the different courier fees, for example, would be easily obtainable. Instead, the expectation is to pay a middle man 'advisor' for this kind of cryptic information. They just kept banging on about needing a UK EORI for imports into UK. Thanks, HMRC, that's really helpful. It's as if they don't value UK exports. Completely the opposite situation in China where they do their best to prevent electronics imports, for example, and officials clearly turn a blind eye to under valued customs declarations on exports.

This may be of interest:

Understanding DHL handling/advancement/customs processing fees Spain

Anybody know where to find a list of DHL customs handling fees they charge to the recipient for DAP deliveries by country? I understand it is 2.5% of VAT+duties (min £12 or some such) here in UK but trying to work out why a customer is being charged what appears to be 16% in Spain for CS...

www.ukbusinessforums.co.uk

 

[The Soup Dragon]

Depends on value and HS classification. 20% , give or take, depending on EU country, is just the VAT. And unless you are VAT registered in that country, you cannot reclaim the VAT. However, there is no UK VAT to charge the customer if you are UK VAT registered (I assume you are in UK and shipping from UK). Duties depend on HS classification and place of manufacture, etc. In addition, a country like Spain will charge various extra 'customs' processing fees just because. Not sure if you get any 'special' fees from the courier for DDP. We do mostly B2B so go with DAP.

This may be of interest:

Understanding DHL handling/advancement/customs processing fees Spain

Anybody know where to find a list of DHL customs handling fees they charge to the recipient for DAP deliveries by country? I understand it is 2.5% of VAT+duties (min £12 or some such) here in UK but trying to work out why a customer is being charged what appears to be 16% in Spain for CS...

www.ukbusinessforums.co.uk

Thanks, we currently do DAP but a lot of customers are baulking at delayed deliveries and having to cough up the VAT before they get their goods............. good old Brexit.

 

[2JP]

Thanks, we currently do DAP but a lot of customers are baulking at delayed deliveries and having to cough up the VAT before they get their goods............. good old Brexit.

Depending on your business model and type of sales, you have to be up front on the quote, for example. You should have empathy with your customer and ensure they get no unpleasant surprises. There is no reason for any customer to be surprised at a local VAT import charge in their country when they would have to pay just as much VAT if they bought the product in their own country.

For low value packages, it is the courier handling fee that will sting and any 'special' customs fees as with Spain. Duties are another thing that may sting for goods not made in UK if you are a reseller. It is these things which have caused small UK vendors to recoil from EU sales. You either have to charge more, stop exporting there, become VAT registered or perhaps sell via some market place with all the admin already in place. The less unique and lower value your individual shipments, the harder you will find the EU as a market place using courier delivery.

 

[JEREMY HAWKE]

Soup ! Are you suppling business to business or to private customers..It is easy to roughly calculate the costs to the customers this however has become more of a challenge if supplying the consumer who may not expect I understand their import costs

 

[The Soup Dragon]

Soup ! Are you suppling business to business or to private customers..It is easy to roughly calculate the costs to the customers this however has become more of a challenge if supplying the consumer who may not expect I understand their import costs

JH B2B but often to Universities and the individual buyers although in a business set up are more akin to individuals and it gets tricky