This answers one question for a small UK shop: after the customs changes of 1 July 2026, what does it cost to send an order to a customer in the EU, and who pays what. It is for someone shipping their own parcels from Great Britain, not a compliance department. Every rule and price below was checked against its primary source on 15 September 2026 and linked. We build Orbit Commerce, so we have a stake in you opening a shop.
Two things have changed since most advice on this was written: the duty-free allowance on small parcels is gone, and the line that “you just register for IOSS” was never true for a Great Britain business anyway.
What changed for EU-bound parcels on 1 July 2026?
From 1 July 2026 the EU removed the exemption from customs duty for parcels valued at EUR 150 or below, and applies “a EUR 3 customs duty charge per item ... on parcels moving from business outside the EU to consumers in the EU” (business.gov.uk, page last updated 12 August 2026, checked 15 September 2026). Before that date a EUR 40 parcel from Britain carried import VAT but no duty. Now it carries both.
Read “per item” slowly, because that is where it bites. A EUR 40 candle picks up EUR 3. A EUR 40 order of six small things picks up EUR 18, 45% of the order in duty alone. If your typical basket is several cheap items, July hurts you far more than someone shipping one mid-priced product.
The same page says the duty charge “will be followed by an EU wide handling fee on e-commerce goods expected from November 2026”. Expected, not in force. Do not price it in yet, but diarise November and re-run your margins then.
None of this changes UK VAT on the sale: exports to a consumer abroad are zero-rated, as covered in our guide to UK VAT for online sellers. What changed is the bill on the other side of the Channel.
Can a UK seller register for IOSS directly?
No. A Great Britain business cannot register for the VAT Import One Stop Shop on its own. HMRC is explicit: businesses in Northern Ireland or Norway “can choose to register for the scheme directly”, while businesses in “countries outside the EU and Northern Ireland (including Great Britain), must ask an intermediary to register and act on their behalf” (gov.uk, last updated 19 February 2026, checked 15 September 2026). Direct registration is open to Northern Ireland businesses and to countries with an EU mutual-assistance agreement on recovering VAT, currently only Norway.
So the honest version is: you can use IOSS, but only through an appointed intermediary who registers in an EU member state, files the monthly returns and carries the risk on your VAT, which is why they charge what they charge. It is a paid service with a recurring fee, not a form you fill in on a Tuesday. There is no reliable public figure for what that costs a one-person shop, so get two quotes and treat it as a fixed monthly cost below.
Two more limits. IOSS covers consignments of £135 or less sold to consumers, and cannot be used for excise goods such as alcohol and tobacco, or for sales to VAT-registered businesses (gov.uk, checked 15 September 2026). And it is a VAT scheme: it does nothing about the EUR 3 duty.
Do you charge EU VAT at checkout, or let your customer pay on delivery?
Two models, trading your margin against your customer’s experience:
- DDP (delivered duty paid). You collect the destination country’s VAT at checkout, you pay the duty, and the parcel arrives with nothing to pay. This is what IOSS makes workable, and it needs an intermediary.
- DAP (delivered at place). You charge nothing extra at checkout. The carrier bills your customer for import VAT and duty before delivery, and adds a handling fee for doing so.
The handling fee is what quietly wrecks DAP. The carrier charges it per parcel, it has nothing to do with the value of the goods, and it lands on a customer who thought they had paid. On a EUR 40 order the doorstep bill can be half the order value again once VAT, duty and the fee are added. Some people pay. Some refuse, and the parcel comes back weeks later, minus the postage, plus a refund.
Our view: DAP is fine for the occasional order and for expensive items, where the fee is small next to the total. If EU orders are a channel you want, DDP is the only version anyone orders from twice.
What you need before you ship: EORI, commodity codes and customs data
Three pieces of admin, none optional:
- An EORI number. You may need one “if you move goods between Great Britain or the Isle of Man and any other country (including the EU)” (gov.uk, checked 15 September 2026). Apply before you promise a delivery date, not after a parcel is stuck.
- A commodity code for every product. Use the UK Trade Tariff tool to “find a commodity code for goods you’re importing to or exporting from the UK” and “check if there’s duty or VAT to pay” (gov.uk, checked 15 September 2026). Store the code against the product once and it is on every label. Guessing is how parcels get held.
- Customs data on the label. Every EU parcel needs an accurate description (“cotton t-shirt”, not “gift”), value, weight, country of origin and your EORI, filed electronically before it leaves. Our guide to Royal Mail versus couriers covers picking a service; for the EU, pick one that files the data properly and offers DDP.
If you go DDP, ask your carrier in writing how it wants the duty paid and whether its service needs an EU-side identifier for your business. The answer differs by carrier and destination, so get it before you advertise a duty-paid price. Check gov.uk before relying on any of this.
Should you price in euros, and what does the conversion cost?
Price in euros if you want EU orders. A German shopper looking at £34.78 has to do maths and guess what their bank adds. EUR 40 needs none of that.
The cost is the conversion, and it is not free. Stripe’s UK pricing adds 2% for currency conversion on top of the card rate, listing EEA cards at 2.5% + 20p and other international cards at 3.15% + 20p (stripe.com/gb/pricing, checked 15 September 2026). Orbit Payments publishes its own: on Solo, UK cards are 2% + 25p and Amex or international cards 3.1% + 25p, with no platform transaction fee. Whichever you use, budget roughly 5% of an EU order for taking the money, not the 2% you see at home.
In Orbit, multi-currency is part of the platform rather than sold as an app: switch euros on and the shopper sees euro prices at live rates, while the order is recorded in your base currency so your books stay in pounds. See the payments page.
A worked example: one EUR 40 order, both ways
Same product, same German customer, same parcel. Assumptions, stated so you can argue with them: product cost EUR 12, postage EUR 9, German VAT 19%, EUR 1.15 to the pound, carrier DDP surcharge EUR 2, DAP handling fee EUR 10 (carriers publish their own, and it varies by country), card and conversion at 5.1% + EUR 0.29 (Orbit Solo’s published 3.1% + 25p international rate, plus a 2% conversion assumption taken from Stripe’s published UK rate, since Orbit publishes no separate conversion charge). Import VAT is taken on the price paid plus duty.
| Line | DDP, VAT charged at checkout | DAP, customer pays on delivery |
|---|---|---|
| Price the shopper sees | EUR 40.00 (incl. 19% VAT) | EUR 40.00 |
| Destination VAT you remit | −EUR 6.39 | EUR 0.00 |
| Customs duty (EUR 3 per item) | −EUR 3.00 | EUR 0.00 |
| Carrier DDP surcharge | −EUR 2.00 | EUR 0.00 |
| Postage | −EUR 9.00 | −EUR 9.00 |
| Card and conversion | −EUR 2.33 | −EUR 2.33 |
| Product cost | −EUR 12.00 | −EUR 12.00 |
| You keep, before the IOSS intermediary | EUR 5.28 | EUR 16.67 |
| Your customer pays on the doorstep | Nothing | EUR 8.17 VAT + EUR 3.00 duty + EUR 10.00 fee |
| Total cost to your customer | EUR 40.00 | EUR 61.17 |
The DAP column looks like the better business right up to the last row. You keep three times as much, and your customer pays 53% more than the price they agreed. That is how you get refused deliveries and the review that costs you the next ten orders. Under UK consumer law a refused parcel is still yours to refund.
The DDP column is honest, and thin. EUR 5.28 before your intermediary’s fee. If that fee is EUR 50 a month and you ship 20 EU orders, it costs EUR 2.50 an order and you clear EUR 2.78. At 5 orders a month it costs EUR 10 and you are paying for the privilege. Price the same product at EUR 49 and DDP leaves EUR 12.39, which is why sellers who make the EU work charge more there.
When is the EU simply not worth it for a small shop?
Often, and no compliance vendor will tell you so. Three tests:
- Volume against fixed cost. IOSS through an intermediary is a monthly fee whatever you sell. Divide it by your realistic monthly EU orders. If that beats your gross margin per order, the EU is a hobby you are funding, not a channel.
- Items per order. EUR 3 per item punishes baskets of cheap goods. Sell EUR 4 stickers by the handful and the duty can exceed your margin before anything else is counted.
- Weight and postage. Postage has always been the line that kills small cross-border orders, and July added to it.
Failing them is not a dead end. Sell to the EU through marketplaces, where the platform handles the import VAT mechanics for sales it facilitates (check its seller guidance, and see our notes on selling on Amazon alongside your own site and multichannel selling in the UK). Set an EU minimum order value, say EUR 80, so the DDP arithmetic works. Or leave the EU off and revisit in November, when the expected handling fee is either real or it is not.
There is no shame in the third one. Plenty of UK shops turning over six figures sell nothing to the EU, and their margins are better for it. If you are early, our breakdown of the cost of starting an online shop in the UK is a better place to put the effort.
Questions people ask about selling to the EU from the UK
Can a UK business register for IOSS?
Not directly. Businesses in Great Britain must ask an intermediary to register and act on their behalf, because direct registration is open only to Northern Ireland businesses and to businesses in countries with an EU mutual-assistance agreement on VAT recovery, currently only Norway (gov.uk, checked 15 September 2026). Expect a recurring fee for that intermediary service.
What is the EUR 3 charge on parcels sent to the EU?
From 1 July 2026 the EU removed the customs duty exemption for parcels valued at EUR 150 or below and applies a EUR 3 customs duty charge per item on parcels sent from a business outside the EU to a consumer inside it (business.gov.uk, checked 15 September 2026). It is charged per item, so multi-item orders of cheap goods are hit hardest.
Do I have to charge EU VAT at checkout?
No, you can ship DAP and let the carrier collect import VAT and duty from your customer before delivery. But the carrier adds a handling fee on top, so your customer pays noticeably more than the price they agreed. Charging destination VAT at checkout through IOSS costs you margin and buys a parcel that arrives with nothing to pay.
Do I need an EORI number to send parcels to the EU?
Yes. Gov.uk says you may need an EORI number if you move goods between Great Britain or the Isle of Man and any other country, including the EU (checked 15 September 2026). Apply on gov.uk before your first EU order, and give the number to your carrier so it appears on the customs data with every parcel.
Should I price my shop in euros?
If you want EU orders, yes. Euro prices remove the guesswork for the shopper. Budget for the conversion: Stripe’s UK pricing adds 2% for currency conversion on top of its card rates (stripe.com/gb/pricing, checked 15 September 2026), so assume around 5% of an EU order goes on taking the money rather than the 2% you see on UK cards.
If you want to test the EU without paying for something you might switch off in a month, the practical part is cheap: multi-currency is part of Orbit rather than an app, so euro prices at live rates and orders recorded in pounds come with the subscription rather than an app bill, and shipping zones price EU delivery separately. The 14-day free trial needs no card, so you can build the store and run your own version of the table above before spending anything: start free.