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Posted 19th October 2020

Brexit: Breaking down the Incoterms

With VAT and possible duties to be paid, it's important to use accurate Incoterms - who's paying for what?

To start breaking down some of the Brexit vocabulary, we’ve picked one of the most important parts – Incoterms. Incoterms specify who is responsible for certain parts of the shipment process such as paying duty and VAT.


For support and checklists for shipping under new Brexit rules, click here for exports and click here for imports.


Who will pay the duty and VAT amounts, and when and where, is something the shipper needs to agree with its customer. This is one of the most important aspects for shipping in 2021: we’ll be asking you which Incoterm you’d like your shipment quoting for – and it needs to be correct.

The most common Incoterms:

DDP stands for Delivery Duty Paid. When goods are bought or sold “Delivery Duty Paid” (DDP) it means that the Seller delivers the goods to a place previously agreed to by the seller and the buyer. Baxter Freight can help - get in touch today. DAP stands for Delivery at Place. Delivered-at-place (DAP) refers to an arrangement wherein the seller covers the costs and takes on the risks of moving product to the buyer's location.

FCA means Free Carrier. Free carrier is a trade term dictating that a seller of goods is responsible for the delivery of those goods to a destination specified by the buyer. EXW stands for Ex Works. The seller delivers when it places the goods at the disposal of the buyer at the seller's premises or at another named place.


Is your business ready for trading after Brexit? Click here to check your exports are ready and here to check your imports are ready.

If you’d like to speak to a member of the team, call 0115 975 0400contact us, or email

“With fewer than 3 months to go, businesses need to prepare now for new procedures whether or not we reach a trade deal with the EU” – Michael Gove, Cabinet Officer Minister responsible for Brexit planning

This weekend marked 75 days until the Brexit transition period is over, and with that in mind we thought it would be a good time to check in with our customers, our suppliers and of course our own team – and not only share the latest border operating model  – but also remind everyone that, whether there is a free trade agreement or a ‘no-deal Brexit’, with the new year will come a new set of rules and processes for the way you currently trade.

After the UK leaves the Customs Union on 1 January, those who are not used to trading outside of the EU will need to learn a whole new vocabulary – on top of everything else.