DDP or DAP for exports to the UK: which model causes more problems

DDP and DAP sound to many companies like ordinary trade acronyms, but in practice they can completely change who is responsible for the documents, the cost of clearance, and the number of problems along the way. In trade with the UK, this choice should not be made at random. This article does not replace contractual advice, but it helps you understand the operational consequences of choosing delivery terms before exporting to the United Kingdom. For a general overview of the rules see Incoterms EXW, FCA, DAP explained.

How DDP and DAP differ

• DDP (Delivered Duty Paid): the seller bears all costs and risks of bringing the goods to the place of destination, clears them for export and import and pays the duty (HMRC: Incoterms). Under the Incoterms 2020 rules this in practice also covers import taxes, including VAT.
• DAP (Delivered at Place): the goods are placed at the buyer's disposal on the arriving means of transport, ready for unloading; the seller bears the risk up to the named place, and import clearance and import charges normally rest with the buyer.

Why DDP is risky when the process is not well organised

Under DDP, the seller takes on a very wide scope of responsibility. They must work out who is the declarant in the UK and whether that party holds an EORI number (see the UK EORI number), check the commodity code and customs value and account for import VAT. If the company does not have a stable partner for clearances, documents and settlements, this model quickly becomes costly and chaotic. Typical DDP slip-ups are covered in customs value and DDP in the UK.

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VAT when selling to customers in the UK

When you ship directly to customers in the UK, the consignment value matters. According to GOV.UK, for consignments of £135 or less sent to Great Britain, UK VAT is charged at the point of sale, so an overseas seller must register for VAT and account for it — the exception is B2B sales where the customer gives a valid UK VAT number. For consignments above £135 the normal VAT and customs rules on import apply (GOV.UK). Accounting for import VAT is explained in Postponed VAT Accounting.

When DAP is sometimes operationally safer

DAP can be simpler where the importer on the UK side has its own structure for handling clearance and the amounts due. This makes it easier to separate the roles and avoid misunderstandings about who is responsible for which stage. See also who is responsible for clearance when exporting to the UK.

5 questions to ask before choosing

1. Who will be the importer on the UK side?
2. Who holds the EORI number and the ability to formally handle clearance?
3. Who controls the commercial and transport documents?
4. Does the company have a partner who actually runs the customs process?
5. Do the contract and the operational team understand the same model of responsibility?

The most common mistake

Companies choose DDP because it seems "convenient for sales", and only later does it turn out they have not prepared the customs and import side on the UK end. If the documents, the EORI, the importer's role or responsibility for the amounts due are unclear, it is better to check the delivery model before the goods move than to fix everything after the fact.

Summary

In the PL–UK relationship, the choice between DDP and DAP has very specific operational consequences. If you want to get your export in order before your first or next shipment, see our export page or send us the topic for a consultation.

Official sources

• HMRC: Customs valuation — Incoterms
• GOV.UK: VAT and overseas goods sold directly to customers in the UK

Frequently asked questions