Despite Brexit, geopolitical uncertainty and rising trade friction globally, Britain remains one of Ireland’s most economically significant trading partners. The UK is Ireland’s largest trading partner for indigenous businesses, a critical export destination for food and drink, and a key source of imports for retailers and consumers.
That closeness makes the UK relationship uniquely important at a time when global trade rules are becoming more fragmented.
Partners and VAT Director at BDO discuss in The Business Post how, while political attention often focuses on tariffs and geopolitics, the real story of post-Brexit British–Irish trade is being written in VAT, customs compliance and the rising cost and complexity of moving goods across the Irish Sea. Read insights from:
Ireland’s reliance on trade is structural, not a strategic choice. The UK is our closest market and culturally similar. UK-Irish trade is critical to our economic growth. Ireland is an open trading economy that bases a large part of its business model on exports. The Irish economy would not sustain an economic model based on national sales alone. While the US dominates Ireland’s export profile, the UK’s role is different, and in many ways, more economically embedded.
That makes the functioning of British–Irish trade especially important at a time when global trade norms are under strain.
Ireland now needs to operate in a world where relationships and regional trade agreements are critical, understanding supply chains and building in risk and resilience becomes a strategic priority, and outward investment needs to be part of your growth strategy.
For businesses and consumers alike, the most tangible impact of Brexit has been the transformation of UK–Ireland trade into a full third-country customs and VAT relationship. According to our VAT team, this shift has fundamentally changed the cost base of buying from Britain.
Since Brexit, Irish consumers have experienced higher costs when purchasing goods from the UK due to a range of new charges and taxes. With the UK now classified as a non-EU country, imports are subject to duties on arrival in Ireland such as import VAT, potential customs duties and often clearance charges.
For many consumers, these costs only become visible after the purchase is complete.
VAT is calculated on the total value of the goods, including shipping and insurance, and customs duties (which are assessed according to the product’s tariff classification and origin). If the seller does not pre-pay duties, the recipient is liable for payment upon delivery.
This has led to widespread frustration, particularly where UK retailers do not collect Irish VAT at checkout, leaving consumers facing unexpected charges at the door.
One of the most significant upcoming changes affecting British–Irish trade is the phased abolition of the low-value customs duty exemption.
Historically, parcels valued at less than €150 were exempt from customs duties under the Low Value Consignment Relief, However, this relief is to be abolished.
The change is driven largely by the explosive growth in e-commerce.
The EU Commission has stated that the huge growth in e-commerce has revealed significant vulnerabilities in the customs system, affected the EU budget and led to a competitive disadvantage for EU suppliers.
As a first step, a temporary flat €3 customs duty will be introduced on small parcels.
For Irish consumers buying from UK websites, these changes will further increase costs, even on relatively low-value purchases. The €3 duty will be applied to each different item, according to their tariff headings, contained in a consignment, adding that additional handling fees are also under discussion to compensate customs authorities for the rising volume of parcels.
Partnering with UK sellers who are registered with the Import One-Stop Shop (IOSS) or who offer Delivered Duty Paid (DDP) services can ensure that all taxes and duties are collected at the point of purchase, eliminating surprises at delivery. It is also important to request clear, itemised invoices that include all charges, and to invest in digital customs solutions that streamline the declaration process and reduce administrative delays. Staying informed about ongoing changes to EU customs rules and communicating transparently with customers about new costs and procedures will be essential. Finally, Irish businesses should review their supply chains and pricing models to accurately reflect the impact of new customs charges and ensure continued compliance.
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