Incoterms 2020 in trade with the UK – why DDP is a trap for Polish exporters? [2026]

Delivery terms (Incoterms) define who is responsible for transport, insurance, customs clearance and costs related to the delivery of goods. In international trade, choosing the right Incoterms is crucial for transaction profitability and risk management.

After Brexit, trade with the UK requires full customs clearance, making the choice of Incoterms even more important. Especially DDP (Delivered Duty Paid) – seemingly convenient for the client – may turn into a trap for the Polish exporter, leading to unforeseen costs and legal complications.

This article explains which Incoterms are best in PL-UK trade, why DDP can be risky, and how to avoid common mistakes.

Problem: Incorrect Incoterms = Unforeseen costs

Why are Incoterms important in trade with the UK?

Before Brexit, the UK was part of the EU, so transport of goods from Poland to the UK did not require customs clearance. Incoterms mainly affected transport and insurance.

The situation changed after Brexit: - Complete customs clearance in the UK (duty, VAT, documents). - Liability for clearance depends on the chosen Incoterms. - Customs duty and VAT costs costs can be significant (even 20-30% of the goods' value).

Practical issue: If the Polish exporter sells goods under DDP (Delivered Duty Paid) means that: - The exporter is responsible for customs clearance in the UK. - The exporter pays customs duty and VAT in the UK. - The exporter must register for VAT in the UK or use a tax representative.

This may lead to: - Unexpected costs (customs duty, VAT, customs agency fees). - Legal complications (VAT registration in the UK, tax returns). - Delivery delays (no EORI GB, documentation errors).

What are Incoterms 2020?

Definition

Incoterms (International Commercial Terms) are international trade rules Developed by the International Chamber of Commerce (ICC). They specify: - Who is responsible for transport (seller or buyer). - Who pays the costs (transport, insurance, customs duty, VAT). - Where the risk passes (the moment when responsibility for the goods passes from the seller to the buyer).

The current version is Incoterms 2020, effective from 1 January 2020.

Most common Incoterms in PL-UK trade

1. FCA (Free Carrier) – Recommended for exporters

Definition: The seller delivers the goods to the carrier at the agreed location (e.g., seller's warehouse, terminal). From that moment, risk and costs transfer to the buyer. Responsibility: - Seller (Polish exporter): - Preparing goods for shipment. - Export customs clearance in Poland (if applicable). - Delivering goods to the carrier. - Buyer (British importer): - Organisation of transport to the UK. - Customs clearance in the UK (duty, VAT). - Delivery of goods to the destination in the UK. Advantages for the exporter: - ✅ No need to register for VAT in the UK. - ✅ No responsibility for customs clearance in the UK. - ✅ Low risk of unexpected costs. Disadvantages: - ❌ The buyer must arrange transport and clearance (may be less convenient for the client). When to apply: FCA is the best choice for Polish exporters who want to avoid complications related to customs clearance in the UK.

2. DAP (Delivered at Place) – A compromise

Definition: The seller delivers goods to an agreed location in the UK (e.g. buyer’s warehouse). The buyer is responsible for customs clearance and VAT. Responsibility: - Seller (Polish exporter): - Organising transport to the UK. - Delivering goods to the destination in the UK. - Buyer (British importer): - Customs clearance in the UK (duty, VAT). - Unloading of goods. Advantages for the exporter: - ✅ No need to register for VAT in the UK. - ✅ Control over transport (choice of carrier, route). Disadvantages: - ❌ Risk of delays if the buyer does not complete customs clearance on time. - ❌ Seller bears transport costs to the UK. When to apply: DAP is a good compromise if you want to offer the customer convenience (door-to-door delivery) but avoid responsibility for customs clearance.

3. DDP (Delivered Duty Paid) – A trap for exporters

Definition: The seller delivers the goods to the destination in the UK and pays all costs, including duty and VAT. Responsibility: - Seller (Polish exporter): - Organising transport to the UK. - Customs clearance in the UK (duty, VAT). - Delivery of goods to the destination in the UK. - Buyer (British importer): - Goods collection (no additional obligations). Advantages for the buyer: - ✅ Maximum convenience – goods delivered "turnkey". - ✅ No additional costs for the buyer. Disadvantages for the exporter: - ❌ Requirement to register for VAT in the UK (or using a tax representative). - ❌ Requirement to obtain EORI GB. - ❌ Paying duty and VAT (may be 20-30% of the goods value). - ❌ Risk of errors in customs clearance (penalties, delays). - ❌ Tax complications (VAT returns in the UK, international settlements). Why DDP is a trap?

1. Unexpected costs: - Customs duty may range from 0-12% of the goods' value (depending on CN code). - VAT is 20% of the goods' value plus customs duty. - Customs agency fees (£50-£200 per shipment).

2. VAT registration in the UK: - Requires a tax representative (cost: £500-£2,000/year). - Obligation to submit VAT returns in the UK (monthly or quarterly).

3. Risk of errors: - Incorrect product classification → higher customs duty. - Missing certificates → goods detention. - Documentation errors → penalties.

When to apply: DDP should only be used when: - You have experience with customs clearance in the UK. - You are registered for VAT in the UK. - The product margin is sufficiently high to cover customs duty and VAT.

4. EXW (Ex Works) – Minimal responsibility

Definition: The seller makes the goods available in their warehouse. The buyer is responsible for everything (transport, insurance, export and import clearance). Responsibility: - Seller (Polish exporter): - Preparing goods for collection. - Buyer (British importer): - Transport organisation from Poland to the UK. - Export clearance in Poland. - Customs clearance in the UK. Advantages for the exporter: - ✅ Minimal liability. - ✅ No transport or clearance costs. Disadvantages: - ❌ Inconvenient for the buyer. - ❌ The buyer must have experience in international logistics. When to apply: EXW is rarely used in international trade because it requires significant involvement from the buyer.

Comparison of Incoterms in PL-UK trade

| Incoterms | Export customs clearance (PL) | Transport | Customs clearance (UK) | VAT in UK | Recommended for exporters? | |---|---|---|---|---|---| | EXW | Buyer | Buyer | Buyer | Buyer | ❌ Rarely used | | FCA | Seller | Buyer | Buyer | Buyer | ✅ Recommended | | DAP | Seller | Seller | Buyer | Buyer | ✅ Good compromise | | DDP | Seller | Seller | Seller | Seller | ❌ Trap |

How to avoid problems with Incoterms?

1. Choose FCA or DAP

For most Polish exporters, the best choice is FCA or DAP. Avoid DDP unless you have experience and resources to handle customs clearance in the UK.

2. Clearly specify Incoterms in the contract

Ensure the sales contract includes: - Incoterms 2020 (not older versions). - Place of delivery (e.g. "FCA Warsaw" or "DAP London"). - Cost allocation (who pays for transport, insurance, customs duty, VAT).

3. Cooperate with a customs agent

If you must use DDP, use the services of a customs agency in the UK (e.g. easyclearance.pl) which: - Will perform customs clearance on its own behalf EORI number GB. - Settles VAT in the UK. - Minimises risk of errors.

How can easyclearance.pl assist?

Advice on Incoterms

Our team can help you: - Choose optimal Incoterms for your transaction. - Estimate customs duty and VAT costs. - Prepare documentation according to selected Incoterms.

Customs clearance in the UK (for DDP)

If you must sell on DDP terms, we can: - Perform customs clearance in the UK under our EORI GB number. - Handle VAT accounting in the UK (if you are VAT registered in the UK). - Coordinate delivery to the customer.

Coordination with partners in Poland

If your transaction requires export clearance in Poland, we coordinate the process through our network of licensed local partners.

Distinction: easyclearance.pl is a customs agency based in the UK. We directly handle clearances in the United Kingdom. Customs clearances within the EU are carried out in cooperation with our network of licensed local partners.

Frequently Asked Questions (FAQ)

Can I change Incoterms after signing the contract?

Yes, but it requires agreement from both parties. We recommend agreeing Incoterms before signing the contract.

Do Incoterms define ownership of goods?

No. Incoterms only define the division of costs and risks. Ownership of goods is determined in the sales contract.

Can I use older versions of Incoterms (e.g. 2010)?

Yes, but we recommend using Incoterms 2020, as they are the most up-to-date and reflect changes in international trade.

What to do if the client requires DDP?

You can: 1. Propose DAP as a compromise. 2. Use a customs agency in the UK (e.g. easyclearance.pl). 3. Include customs duty and VAT costs in the sales price.

Do Incoterms also apply to air and sea transport?

Yes. Incoterms 2020 cover all modes of transport.

Summary

Choosing Incoterms in trade with the UK is crucial for costs and responsibilities. Key principles:

1. FCA or DAP – best for Polish exporters. 2. DDP – avoid unless you have experience and resources. 3. Clearly specify Incoterms in the sales contract. 4. Cooperate with a customs agent – minimise the risk of errors.

Need help with Incoterms?

If you trade with the UK and need advice on Incoterms, contact easyclearance.pl. We will help select optimal delivery terms and handle customs clearance.

easyclearance.pl is a customs agency based in the United Kingdom. We directly handle clearances in the UK. Customs clearances within the EU are carried out in cooperation with our network of licensed local partners. Contact us →

What the current official guidance means in practice

For operational work, the current procedural rules, declaration fields and relief conditions should be checked directly against the official guidance. For this topic, the core reference points are European Commission, GOV.UK / HMRC.

Official sources

• EU Commission (Customs procedures) — European Commission, 2026-03-04
• UK GOV (Importing into the UK) — GOV.UK / HMRC, 2026-03-04
• GOV.UK: Customs Declaration Service — GOV.UK / HMRC, 2026-03-04