Shipping to the EU from a UK warehouse: IOSS, DDP and who pays the duty

October 2026 · 9 min read · Angler Fulfilment

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If you sell into the EU from the UK, you have probably read in the last few months that the rules on small parcels have changed. They have. But three separate things changed, on three different dates, and most of what has been written runs them together. Sellers are being told that IOSS has gone, which it has not, and that the €150 threshold has been scrapped, which is only true for one of the three charges.

This piece separates them, with the dates and the primary sources, and then covers the practical part: the paperwork that travels with a parcel, what DDP and DAP mean at your customer’s door, and why EU parcels actually get held.

Three changes, not one

What	Kind of charge	Status
€3 duty on small parcels	Customs duty	In force since 1 July 2026, until 1 July 2028
IOSS and VAT	VAT	Unchanged. Still covers consignments up to €150
EU handling fee, €2 per item	A customs handling fee	Amount set on 21 September 2026; starts ten days after publication in the Official Journal

1. Customs duty: the €150 exemption has gone

Until this summer, goods sent to EU consumers in consignments worth €150 or less paid no customs duty. On 13 November 2025 EU finance ministers agreed to abolish that rule. The permanent version arrives with the EU customs data hub, currently expected in 2028, and in the meantime a temporary measure took effect on 1 July 2026.

The temporary measure is a flat €3 per item line, and the detail matters. The European Commission says the €3 is applied per declaration line, regardless of how many units are on that line, where a line is goods sharing the same tariff classification, description and origin. So:

• A parcel of three identical T-shirts is one line: €3.
• A parcel with a T-shirt and a mug is two lines: €6.
• A parcel with five different products is five lines: €15.

It applies to consignments of €150 or less sold to consumers, and the Commission is explicit that it applies whatever VAT arrangement the parcel travels under, IOSS included. It runs until 1 July 2028.

2. VAT and IOSS: nothing changed

This is the part most commonly got wrong. IOSS, the Import One Stop Shop, is a VAT scheme. It has nothing to do with the duty exemption that went.

The VAT exemption on small imports went much earlier: the EU abolished the old €22 VAT exemption on 1 July 2021, so every parcel into the EU has carried VAT since then. IOSS exists to collect that VAT at your checkout for consignments up to €150, so your customer is not asked for it on delivery. The EU’s own Your Europe service still describes it that way today.

Two practical points. A seller with no establishment in the EU generally has to appoint an EU intermediary to use IOSS, according to the Commission. And orders sold through Amazon, eBay or Etsy normally travel under the marketplace’s own IOSS number, so for marketplace sales the question is usually already answered.

3. The handling fee: a separate charge still to start

On 3 September 2026 the Council of the EU confirmed that an EU-wide handling fee on small parcels would be introduced by 1 November 2026, and was explicit that it is separate from the duty change. The Commission set the amount on 21 September 2026: €2 per item. Its regulation applies ten days after it is published in the Official Journal, which had not happened when we checked on 7 October 2026, so the exact start date is not yet fixed. The Commission’s own text notes it also applies to distance sales above €150.

We are not going to print a start date until there is one. When it applies, ask your carrier in writing how they will pass it on.

What a small parcel costs now

Put together, a €40 order of two different products shipped to a consumer in the EU now looks like this, before postage:

• VAT at the destination country’s rate, collected at your checkout if you or the marketplace use IOSS. Unchanged.
• Duty of €6, being two item lines at €3. New since 1 July.
• The handling fee, once it applies, at €2 per item.

On a €40 order that is a meaningful new cost, and on a €10 single item a €3 duty is close to a third of the price. That is the uncomfortable conclusion worth stating plainly: for very cheap products sold one at a time, EU sales from the UK have become materially less attractive this year, whoever ships them. Bundling, minimum order values for EU customers and EU-specific pricing are all reasonable responses. Pretending nothing has changed is not.

DDP or DAP: who meets the charge

The terms a parcel travels under decide who pays these charges and when. GOV.UK sets out the two that matter for e-commerce:

• DAP, delivered at place. The goods are delivered ready for unloading at the destination, and the buyer deals with import clearance. Any duty, and any VAT not already collected through IOSS, is your customer’s to pay, usually before the parcel is handed over.
• DDP, delivered duty paid. The goods arrive cleared for import, and the seller pays the duty. Your customer pays nothing at the door.

Before July, an IOSS parcel under €150 shipped DAP usually arrived with nothing to pay. Since July it can carry duty, so on DAP routes your customer may now meet a charge they did not expect, even though the VAT was paid at your checkout. That is the single biggest practical change for sellers, and the reason DDP is worth pricing on your main EU markets.

Where we can offer DDP, on selected carriers and routes quoted per market, we settle the duty up front and recharge it to you at cost. Everywhere else the parcel travels duty unpaid and the recipient settles on delivery. The route by route position is on our international fulfilment page.

The paperwork that travels with a parcel

Every parcel leaving the UK for the EU needs a customs declaration. What that involves:

• A customs form. The Post Office puts the line at £270: goods sent with Royal Mail’s international services valued under £270 use a CN22, and above that a CN23.
• A commodity code for each product. Royal Mail asks for an HS or tariff code of at least six digits. GOV.UK has a guide to finding the right commodity code, and it is also what decides which item line each product falls on for the €3 duty.
• An EORI or VAT number. Royal Mail asks business senders for a GB EORI number or VAT registration number where applicable, and GOV.UK says you may need an EORI number to move goods between Great Britain and the EU.
• An honest value and a specific description, which is the next section.

On our side, we generate the commercial invoice and customs declaration on every international order and apply CN22 or CN23 labelling where the destination needs it. We store your commodity codes and customs values against each SKU, so every parcel of a product declares the same thing. You supply the codes, values and descriptions and remain responsible for them, which is clause 18.4 of our terms.

Why EU parcels actually get held

Almost never because of the rules above. Nearly always because of what is written on the declaration.

Royal Mail’s customs guidance is blunt: ambiguous or generic descriptions are not allowed, and if a declaration is incomplete or inaccurate the parcel may be delayed, held or returned by customs. “Clothes”, “parts” and “sample” are the classic ones. “Women’s cotton T-shirt” is a description; “clothing” is not. The gift category is for private individuals sending to each other, not for a business sending an order.

Undervaluing is the other. When the Council agreed to scrap the duty exemption, its own announcement said up to 65% of small parcels entering the EU are undervalued, and customs authorities are paying attention accordingly. Declare the price the customer paid.

The practical defence is to get each product’s description, value and code right once, at the start, and then have every parcel of that product declare exactly the same thing. Improvising it parcel by parcel is how one bad declaration becomes a pattern.

A checklist before your next EU order

• Work out which EU sales use whose IOSS. Marketplace orders normally travel under the marketplace’s number; orders through your own website use yours, or none.
• Write each product’s commodity code and a specific description down once, and use them on every parcel of that product.
• Count the item lines in a typical EU order and add €3 for each to your EU pricing.
• Decide per main market whether you want DDP, so your customer pays nothing at the door, and get it quoted.
• Ask your carrier in writing how the €2 handling fee will be passed on, and from what date.
• Have your EORI or VAT number ready if you ship as a business.

One UK warehouse, or stock in the EU?

For most sellers doing a few hundred parcels a month, one UK stock pool shipping into the EU is still simpler and cheaper than splitting stock: you avoid funding duplicate inventory, duplicate storage and a second set of admin before the order volume justifies it. The new duty does not change that arithmetic much for higher-value orders.

It changes it more for cheap, single-item orders into one or two big EU markets, where an EU stock position starts to look sensible sooner than it did a year ago. When your volume genuinely justifies splitting stock, we will say so rather than keep the work.

EU shipping, answered

Does the €3 EU duty replace VAT on small parcels?

No. They are separate charges. The €3 is customs duty, which has applied since 1 July 2026 to consignments of €150 or less sold to consumers. VAT is unchanged: it is still due on every imported parcel, and for consignments up to €150 it can still be collected at checkout through IOSS. A small parcel now carries both.

Is the €3 duty charged per parcel or per item?

Per item line. The European Commission says the €3 is applied per declaration line, regardless of how many units are on that line, where a line is goods in the consignment sharing the same tariff classification, description and origin. Three identical T-shirts are one line and €3; a T-shirt and a mug are two lines and €6.

Can a UK seller register for IOSS directly?

Generally not on its own. The European Commission says a seller with no establishment in the EU needs to appoint an intermediary to use the scheme. Orders sold through Amazon, eBay or Etsy usually travel under the marketplace’s own IOSS number instead, so the question mainly matters for sales through your own website.

When does the EU handling fee start?

The Council of the EU said it would be introduced by 1 November 2026. The Commission set the amount on 21 September 2026 at €2 per item, applying ten days after that regulation is published in the Official Journal. It had not been published when we checked on 7 October 2026, so confirm the start date with your carrier.

What is the difference between DDP and DAP?

Under DAP the goods are delivered ready for unloading at the destination and the buyer deals with import clearance, duty and any VAT not already collected. Under DDP the seller delivers the goods cleared for import and pays the duty. For an online seller, DDP is the one where your customer is not asked to pay anything at the door.

What happens to an EU order worth more than €150?

IOSS cannot be used above €150, so import VAT is not collected at your checkout. Duty and VAT are worked out on import at the normal rates, and on a parcel shipped DAP the recipient is asked to pay them before delivery. If you sell above that value regularly into the EU, it is worth pricing those orders on a DDP route.