UK retailers are considering burning clothes that have been shipped to customers in the EU because of extra costs and red tape resulting from Brexit. According to the UK Fashion and Textiles Association (UKFT) EU consumers buying goods from the UK-based fashion websites are being handed bills for customs clearances and VAT of 20 per cent or more than the cost of the goods.
UK high street and luxury fashion brands have a mounting volume of goods building up in the EU that customers have returned, often because they have been asked to pay extra costs that they did not expect. When customers return goods there is additional paperwork to complete as well as fees including export clearance charge, import charge arrival, and import VAT. Fashion retailers are among companies that face tariffs on exports to the EU if the goods were not made in the UK. The charges are 12 per cent at items. The additional time and expense meant it may be cheaper for retailers to write off the cost of the goods rather than dealing with the problem.
UK customers buying from the EU are also being hit with additional bills. Since the trade deal came into force, UK shoppers ordering items from Europe costing more than £39 are likely to be given a VAT bill. And for items over £135, some customs duties may also apply. Thought businesses would adapt in the coming months to minimise the unexpected customs and tax bills. Exporters are likely to pay duties before they arrive in most cases.