How to price your products for EU customers (including duty and VAT)

Pricing for EU customers is one of the areas where post-Brexit complexity hits UK small businesses hardest. Get it wrong and you're either losing margin by absorbing unexpected costs, or losing customers who get hit with surprise charges at the door.

Here's a practical framework for getting it right.

Why EU pricing is different now

Before Brexit, pricing for EU customers was simple. You charged the same as UK customers, adjusted for shipping, and that was it. VAT was handled within the single market framework and nobody got surprise bills at the door.

Post-Brexit, there's a gap between what your EU customer pays at checkout and what they actually pay in total to receive your product. That gap — made up of destination VAT and potentially import duty — either lands on your customer unexpectedly, or you absorb it yourself. Neither is ideal unless it's a deliberate choice.

Step 1: Know your product's duty rate

The first thing to establish is whether your product attracts import duty when entering the EU from the UK. Under the UK-EU Trade and Cooperation Agreement, many UK-made goods qualify for 0% duty — but not all.

Use ClearShip or the UK Government's Trade Tariff tool to find your product's duty rate. For most handmade goods, craft products, homeware and general consumer goods, the answer will be 0%. For some textiles, footwear and food products, a rate of 3–12% may apply.

Step 2: Calculate the destination VAT

Every EU country has a different VAT rate. The main ones UK sellers encounter:

• Germany: 19%
• France: 20%
• Netherlands: 21%
• Spain: 21%
• Italy: 22%
• Ireland: 23%
• Denmark: 25%

VAT is applied to the CIF value — product price plus shipping plus any duty. So your shipping cost affects the VAT bill your customer faces.

Step 3: Decide your approach

Once you know the duty rate and destination VAT, you have three pricing options:

Option A: DAP with transparency — ship as normal but tell your EU customers exactly what they'll face on delivery. Calculate the landed cost using ClearShip, add a note to your listings, and let customers make an informed decision.

Option B: DDP with built-in costs — cover the import charges yourself and build them into your EU price. Your EU customers pay a single transparent price with nothing due on delivery.

Option C: EU-specific pricing — set a separate higher price for EU customers that reflects the landed cost. If your product costs £150 and the typical EU landed cost adds £35, your EU price is £185.

A practical example

A UK candle maker sells candles at £45 each. They want to sell to French customers.

The customer paid £54 at checkout. The gap is £11 — the VAT bill at the door.

Under Option A: tell French customers a VAT charge of approximately £11 may apply on delivery.
Under Option B: price French orders at £65 and cover the VAT yourself.
Under Option C: set your French price at £65 so customers pay the full landed cost upfront.

The one thing not to do

Don't ignore the gap and hope customers won't mind. They mind. The surprise bill at the door is the single biggest source of negative reviews and refused deliveries for UK sellers shipping to Europe. It's entirely preventable.

Start by calculating the landed cost for your most common EU shipments. ClearShip does this in seconds. Once you know the numbers, you can make a deliberate pricing decision rather than an accidental one.