TITLE: EU Customs Reform, the €2 Handling Fee and HMRC VAT Assist: What Cross-Border Sellers Must Track
Deadlines and changes to track
- 1 October 2026: Temporary 0% VAT for qualifying domestic electricity supplies in Great Britain begins. Northern Ireland remains at 5%.
- 1 November 2026: The EU-wide €2 Union handling fee is expected to apply to eligible distance-sale imports, subject to the delegated act becoming final.
- 30 December 2026: EU Member States must transpose the first phase of ViDA reforms.
- 31 December 2026: Transitional UK VAT group refund claims for VAT incurred between 1 July 2025 and 30 June 2026 are due.
- 1 January 2027: First-phase ViDA measures apply. Germany’s B2B e-invoicing requirement begins for issuers with prior-year turnover above €800,000.
- Around April 2027: HMRC expects to introduce VAT Assist through compatible Making Tax Digital software.
- 21 September 2027: The new EU customs framework generally applies, including importer-for-distance-sales obligations and the systematic non-compliance penalty regime.
- 1 July 2028: The EU Customs Data Hub becomes usable for importers for distance sales and IOSS users. The VAT Import Special Arrangement is also scheduled to expire.
- 1 March 2034: The EU Customs Data Hub becomes mandatory for all economic operators.
Cross-border ecommerce compliance is moving towards real-time data, platform accountability and tighter customs controls. This week, the EU’s new Union Customs Code has entered into force, a €2 handling fee is moving closer to implementation, and HMRC has published details of VAT Assist.
Here is what you need to track and how to prepare your business.
1. Prepare now for the new EU customs accountability model
Regulation (EU) 2026/2108 was published on 19 September 2026 and entered into force on 20 September 2026. It establishes the new Union Customs Code, creates the European Union Customs Authority in Lille, France, and repeals Regulation (EU) No 952/2013.
The European Commission describes this as the most comprehensive reform of the EU customs framework since 1968. Its goal is a data-led customs system supported by the EU Customs Data Hub.
For online sellers, the most important change is the new concept of the importer for distance sales. This may be:
- The person supplying the goods.
- The online marketplace or platform facilitating the sale.
The importer for distance sales must provide customs information before release, pay customs duties and other charges, retain compliance records, and ensure goods meet relevant product safety and environmental requirements.
You should map this responsibility now. Review marketplace agreements, customs broker arrangements, IOSS registrations, product data and delivery terms. Doing so will help you avoid uncertainty when the general rules apply from 21 September 2027.
2. Model the €2 handling fee separately from VAT and customs duty
Article 20(2) of the new Union Customs Code introduces a permanent, non-refundable Union handling fee for goods sold through distance sales and imported into the EU.
The European Commission has adopted a delegated act setting the fee at €2 per product category. It is expected to be levied from 1 November 2026, provided neither the European Parliament nor the Council objects during the review period.
The fee is expected to apply regardless of consignment value, including consignments above €150. The importer for distance sales is responsible for paying it at least monthly.
Keep the following charges separate in your systems:
- The €2 Union handling fee.
- The temporary €3 customs duty on qualifying low-value consignments, already in effect from 1 July 2026.
- Import VAT.
- Standard customs duty where applicable.
The Commission considers the handling fee compensation for a public authority service. Therefore, it is outside the scope of VAT, is not a customs duty, and does not form part of the import VAT taxable amount.
The €3 duty also requires careful treatment. It is not included in the taxable amount reported under IOSS because it becomes due when the customs declaration is accepted, rather than when the customer purchases the goods.
Update your pricing, margin and accounting rules before the fee becomes operational. This will prevent customs charges from being incorrectly treated as VAT or product revenue.
3. Protect your business from systematic non-compliance penalties
Article 276 introduces a specific penalty regime for systematic non-compliance in distance sales.
A first systematic infringement may result in a charge of between 1% and 4% of the total value of goods imported into the EU during the preceding 12 months. It may also lead to suspension, revocation or annulment of AEO or Trust & Check status.
Further infringements within the specified six-month periods may increase the charge to between 3% and 6%. Authorities may also restrict access to the operator’s online interface.
The consequences extend beyond a financial penalty. The operator may be classified as a high-risk economic operator in the EU Customs Data Hub. Under Article 77(5), customs may have reason to believe that goods notified by the operator do not comply for at least six months. This creates a risk of release being suspended across an entire import flow.
Maintain daily controls over:
- Product descriptions and tariff classifications.
- Customs values and product identifiers.
- IOSS and marketplace data.
- Importer and indirect representative details.
- Product safety and environmental documentation.
- Reconciliations between orders, shipments and customs declarations.
4. Build towards Trust & Check status early
Trust & Check Trader status is a higher tier of trusted-trader recognition built on the existing AEO framework.
Applicants will need a clean compliance record, control over their supply chain, financial solvency, professional standards and an electronic system that gives customs access to real-time or near-real-time information.
Importers for distance sales must also have been registered for and made appropriate use of IOSS for at least two years before applying.
That makes early preparation essential. Potential benefits include:
- Self-release of goods into free circulation.
- Periodic duty payment for periods of up to 31 calendar days.
- Self-calculation of customs debt.
- Access to the customs warehouse for distance sales, where eligibility conditions are met.
Applications may be made from 21 September 2027, with facilitations applying from 1 July 2028. If IOSS could support your future operating model, assess registration and usage requirements now rather than waiting for the Data Hub to launch.
5. Strengthen UK VAT controls before HMRC VAT Assist arrives
HMRC published its VAT Assist transparency record on 9 September 2026. The service is in pre-deployment and is expected to launch around April 2027 through compatible Making Tax Digital software.
VAT Assist will compare draft VAT return figures with information HMRC already holds. It will then provide digital nudges where its rule-based checks identify potential errors.
It will not:
- Review underlying invoices.
- Analyse every transaction.
- Prefill your VAT return.
- Operate as continuous transaction control.
- Prevent you from submitting a return.
