Profits warning to e-commerce traders in UK who export to EU from November
Online retailers could see Christmas profits wiped out as new EU customs charges add costs to every parcel shipped to European consumers.
The alert comes from Gordon Baird, customs and duty tax director for the UK at international accountancy and business advisory firm Azets.
Coming into force just weeks before peak festive trading, the new charges risk turning profitable low value sales into loss-making transactions whilst driving consumers to refuse deliveries due to unexpected fees.
According to sector figures, there are more than 121,000 live e-commerce businesses registered in the UK.
Edinburgh-based Gordon said: “For many online retailers, the final quarter of the year is make-or-break time.
“Black Friday, Cyber Monday and Christmas often account for a disproportionate share of annual revenue with businesses relying on strong festive demand to deliver profitability and consumers demanding the fast-parcel shipments e-commerce has us all accustomed to.
“This year, however, a significant customs change is arriving just as peak trading begins.
“Following the removal of the EU’s low-value customs duty exemption in July 2026, a flat €3 customs charge applies to goods imported into the EU with a value of €150 or less.
“A further EU-wide handling fee of €2 per parcel is now confirmed to apply from November 2026 irrespective of value, adding another layer of cost for businesses shipping directly to European consumers.
“While €5 may not always sound significant, the €2 charge is applied per declaration line or product type, irrespective of shipment value, where the €3 fee applies only to values of below €150.
“The result is that mixed-product orders can quickly attract multiple charges and see Christmas profits wiped out.”
For example, a £65 Christmas gift box containing three different product categories could attract €15 in customs-related charges before any local VAT, courier administration fees or duty are considered.
“For many small retailers, that amount represents most, if not all, of the profit margin generated from the sale,” Gordon added.
“The impact may be material for gift retailers, clothing brands, specialty food suppliers and consumer goods businesses, where Christmas baskets and multi-product gift sets are common and per-line-item charges stack.”
Gordon said the challenge extends beyond the number of products in the parcel as many UK retailers now sell products sourced from multiple countries.
A single package might contain the same commodity item, from different origins which would be entered as a separate line attracting separate fees.
Many UK businesses continue to operate on a Delivered at Place (DAP) basis which places the import liability on the customer, via the fast parcel operator as their agent.
“On paper, DAP looks attractive because the customer pays import charges and fees upon arrival, reducing the immediate burden on the seller.
“Recent EU customs reforms also indicate a broader policy direction towards making those facilitating sales into the EU responsible for customs compliance and collection obligations, rather than leaving responsibility with individual consumers.”
For retailers still operating on DAP basis, the changes should be viewed as an urgent warning, Gordon cautioned.
“Consumers are increasingly unwilling to accept unexpected charges on delivery, particularly during the Christmas shopping season.
“Businesses that fail to review their EU sales model may find abandoned baskets replaced by refused deliveries and lost customers.”
With further EU customs reform increasingly focused on shifting compliance obligations towards online sellers and marketplaces, the direction of travel is clear, Gordon stated.
“Local businesses selling into Europe should use the remaining weeks before peak trading to understand their exposure and consider whether alternative fulfilment, Import One-Stop Shop or DAP models could provide a more sustainable route to market.
“Many founder-led ecommerce businesses operate on tight margins and rely heavily on Christmas trading.