We're 4 months into 'Post Brexit' and discovering all the things that could possibly go wrong, but for some unfathomable reason that I cannot work out, the operations which are suffering most as a result of the new customs arrangements everywhere, are the couriers!
Typically I used to use UPS for everthing going West - so USA etc., and DPD for everything going East of here - so EU etc.,
DPD are a French company with a highly sophisticated digital tracking system and I have literally never ever had a problem with them in 10 years. Now it seems they are in meltdown! I can't understand it. I would have thought if anyone could cope, it would be DPD. But alas no.
I haven't tried UPS because my usual booking company has put them off limits! WTF I hear you say? It's a mystery!
My EU custom had dropped right off in January as expected, but slowly my lovely EU customers are coming back. Partly it seems, this is because the only service out of the UK who seems to be getting on with the job with absolutely no problems at all, is the Royal Mail! I haven't had one single problem with anything going to the EU with the Royal Mail and there don't seem to have been many or any 'problems' with customs (touches as much wood as possible!!). Customers all over Europe have been reporting safe, quick and free of customs deliveries.
SO, I have upped the postage rates for parcels which weigh over 2kg. This is so that I can break larger orders into 2kg packages and send by Royal Mail. It's more expensive I know, but it's the only way I can guarantee you getting your stuff in the usual amount of time, rather than 3 months down the line, but as ever, any excess postage paid will be refunded.
I'm sorry about having to do this but until the courier companies get to grips with the situation, this is the best we can do for our own service to our customers.
So it's been 4 weeks since "the Big B", the UK is in chaos, the news is full of 'shocked' consumers and tales of ridiculous customs bills on both sides of the Channel. It's a testament to the efficiency and honesty of our government propaganda machine - I mean PRESS, that people had absolutely no idea what would happen after Brexit, but here we are. Business from the EU to the UK has almost shut down completely, and literally everyone on the planet is confused. I'm here to offer a bit of clarification as far as our customers at Sew Curvy are concerned anyway. However, this should apply to any small business operating in the UK.
Since 1 January, UK is no longer part of the trading bloc known as the European Union (EU). We have a 'free trade deal' which does not do what it says on the tin. It's exactly what our PM said it was, a "non no tarrif deal" (or whatever nonsensical phrase he used). Basically it means that there are no tarrifs payable on (most) goods going between the UK and the EU and there are no duties on many goods as long as the country of origin is UK or EU. It's complicated. Firstly, if you can decipher the difference between a tarrif and a duty from this simple explanation, you are a better woman than me.
Both are taxes, and both are payable to the UK government where goods are imported to the UK. If you are in a different country, you may have more easy to understand definitions of goods that attract tarrifs and goods that attract duties. On the whole, if goods are made and sold in the UK or the EU then duties may not apply - there are exceptions such as alcohol. Apparently these taxes are there to protect our industry, but the only trouble is, that since the UK joined the EU in the first place, nearly 40 years ago, we don't actually have much of what you could call 'an industry' here. Each country over the years has developed specialties, and ours which was manufacturing, stopped, and now Germany is the main manufacturer for Europe (important to remember this).
Here's a picture of just how clear the whole situation is to most people including professionals:
OK so on the level of Sew Curvy, as a business which is a small one woman company, not a huge corporation, things are panning out quite simply (I think). I received my first post Brexit consignment of Steel (remember what I said about Germany? yes that's where all the corset steel comes from) ... There was no duty to pay, but there was quite a hefty 'customs fee' payable to the carrier who imported the goods for me. VAT was always payable and this has been dealt with in the usual way. So far so good. But it was only a small shipment, and I am still suspicious on how things will pan out.
For my customers, I've seen a massive drop in EU sales - not surprisingly. I have sent some packages though, mostly to Norway - where nothing has changed, and other countries in the 'rest of the world' catergory - Australia, New Zealand and USA where nothing has really changed.
In short, the EU is now treated like "rest of the world" and here is a list of bullet points of everything I know so far.
For UK businesses importing from the EU:
There is VAT payable to the UK government on all imports from EU - this is normal but the way it is applied and paid has changed.
There are no duties payable on (most) goods which originate in the EU.
There are additional customs fees payable to logistics firms who have to do all the paperwork involved at the port of entry - this seems to be a single charge of around £50-60 at the moment. If other fees are paid by the logistics firm, then a charge of 2% of the total value of the shipment is also payable.
For UK consumers importing from the EU and the rest of the world:
For orders under £135.00, VAT is payable to the UK government at source. This means that businesses outside the UK selling to UK consumers must register for VAT with HMRC, and then charge and collect 20% vat and then pay it to the UK government directly. If the company does this via a sales platform such as Amazon or Etsy, the responsibility for VAT transfers to the sales platform. If you order something via a sales platform, pay VAT and then are charged VAT again at entry then this is wrong. There IS an appeals process. For goods imported by post it's HERE. And for goods imported by couriers it's HERE.
There are different rules if you are both the exporter and the importer (ie if you have a sales office in the UK but ship from the EU).
For orders over £135.00, VAT is still payable to the UK government, but at point of delivery which means it should be collected by the carrier who delivers the goods. There will be a processing fee and an onward postal fee which will make goods quite a lot more expensive. The customs fees payable in this case are applied to the value of the goods and the postage paid.
Our previous threshold of goods under £15 not being subject to fees/taxes etc., is now null and void. It's been abolished. There's no threshold.
Obviously, small sellers everywhere else, are not going to find it easy to either register with HMRC for VAT (there is no threshold as there is for UK sellers), or commit to the vast amount of admin necessary to be able to implement such a system just for UK customers. This means that many businesses will simply stop selling to us. However, in July 2021, the arrangement becomes recipricol. UK businesses will have to register for VAT with the EU and then pay the EU any VAT charged to EU customers.
Is your head hurting yet?
Right now, we are surviving with our Brexit stockpile and renewed 'faith' that it's not going to be so difficult importing corsetry supplies from Europe as originally thought. But I'm not counting my chickens or putting eggs in any baskets - I'm taking each day as it comes. There will be price rises when new stock arrives, but hopefully many hiccups will be smoothed out by then.
Regarding our sales to EU countries, these are now treated in the same way as sales to countries outside the EU - this is what we have been doing:
All our packages now carry electronic customs data
We have to complete the tarrif code and the value of goods in our postal system. This is then stored in the bar code on your address label
For safety we are also printing out CN22 forms for all packages going outside the UK - see the picture at the top to see what this looks like.
We are not allowed to mark goods sold as 'gifts' - actually this is impossible to do as the system is set up automatically. The whole reason this electronic / digital system is now in force is because of fraudulent acitivity in the postal world, and governments realising that they are being done out of alot of revenue with the growth of online trading and companies marking goods with no value.
So far I have only had a couple of hiccups with EU orders - literally only a couple and I have been monitoring deliveries for the last couple of weeks.
I have set all overseas postage to tracked so that I can do this. In these uncertain times, it is frustrating when it is not possible to track any problems.
There have been border problems in the UK for goods leaving us, and these have been caused by the pandemic as well as Brexit. Postal updates can be seen HERE - so if you're not sure how the service in your country will be impacted, do check that list.
an example of the new electronic customs form which will accompany every parcel going outside of the UK
Well the good news is that the UK has a 'free trade deal' with the EU. Hurray!
From 1 January 2021, our Brexit transition period ends, and all countries in the European Union will be, as far as the UK is concerned, 'ROW' (rest of world).
This means that the way we post things to the EU will change - goods posted out of the UK to the EU will be treated the same as goods going anywhere else outside the EU - so America, Norway, Switzerland, Australia, etc.,
Luckily Sew Curvy has been trading with countries all over the world for the last 10 years so we know what to do now although there have also been changes that apply to everyone. These are as follows:
1. Goods to EU and ROW do not include VAT - this will not appear as a sum off your total as VAT is paid from our profits. We do not add VAT to our prices because we are on a 'flat rate' scheme - honestly it's complicated and this will be reveiwed in March '21.
2. Parcels to EU and ROW will include detailed customs information and an electronic 'label' containing tarrif codes and value. This is a compulsory change all over the world and is to do with taxes and security, not 'youknowwhat' (brexit).
3. Customers may have to pay customs charges when parcels arrive in their country. This customs amount will be VAT or Sales Tax. Some countries will have thresholds allowing for the private import of goods. For instance, in the UK, our 'customs threshold' is £15 - this is in line with most EU countries. In USA it is $200. This means that you can import goods to this value without incurring VAT or import charges.
4. EU customers will not pay import duties, only VAT at the rate set by their country over any threshold.
5. EU and ROW business customers will be able to claim any VAT back from their tax office as VAT will have been paid in the form of customs charges and is not included in the price of goods.
6. For the next month at least, all orders going outside the UK will be sent by tracked mail - this is so that I can keep an eye on things as we transition into this new situation. (I know for instance that mail from UK to Netherlands has already been held up in customs from October! This was not supposed to happen until January!).
Overall, the free trade deal with EU is better than we in the UK were expecting. It means that we will not have to pay tarrifs on goods coming in from the EU, which for all of our customers means minimal cost increases - I need to see if there are now going to be any 'processing fees' - this will become apparent over the next few months but will not affect any stock we currently hold.
I am releived that Sew Curvy can for the time being continue trading as we were. Lets keep everything crossed that our small UK businesses continue to thrive!
And soon it will be brexit too! As it is now past the posting deadline for corset supplies to get to Europe before they have to go through customs, I have decided to take some time out for a number of reasons.
1. We need to take stock - it's been a crazy year! Orders going out like mad has meant we've hardly had time to update stock let alone catch our breath - since March we have had 3 pallets of corsetry steel and plastic whalebone delivered with the last arriving today.
Eagle eyed customers will also have notcied a shiney new shelf in the Fabric department where we have been selling coutil remnants, roll ends, and slight seconds. These usually go very fast only hours after they are listed, so you'll be forgiven for having missed them! Anyway ... there is still a mountain to climb on that front ... We have 'bundles' to list yet, which include bra making materials, herringbone coutil boxes, lace and trim bundles and special edition corset making kits.
Corsetry coutil fabric remnants for sale at reduced prices. Sometimes this includes corsetry fabrics which are no longer in stock or available so the early bird does catch the coutil worms!
The famous pile! It's getting alot smaller but there are still corset making goody bags to go! We have closed the Etsy shop where all this used to be listed because fees and postage rules are ridic!
The corset boning roll ends is always the biggest pile! This is particularly handy for when you need small or odd amounts of flat spring steel and plastic whalebone.
2. We need to figure out what to do after the Brexit transition period which ends on 1 January 2021. As yet, there are no guidelines at all. For a small business like Sew Curvy, the most difficult thing is VAT. Customs information etc., is all taken care of through our Royal Mail 'Click and Drop' account but we need to be more clear on the way we present products and VAT.
3. We haven't had a furlough scheme going on at Sew Curvy and while that has been a blessing in disguise because I was able to get out of the house, it has been crazy busy - we have sent out more corset kits this year, than in the whole of the previous 10! You'll see from my previous blog posts that there has been some personal busy'ness going on too - moving house during a lockdown, is no small endeavour let me tell you.
Corset making supplies going out all over the world This was a quiet day!
I have therefore decided that the 2 week festive break will be an ideal time to take a bit of time off, and sort out the shop & studio without the pressure of orders to send out daily.
I have therefore turned off the shopping basket for the Christmas period and will re-open on 31 December. We need this time in order to catch up with ourselves after what has been a hectic year, and to prepare for the year ahead and our new trading status outside of the EU. This means we are sorting out stock, getting a sale ready, streamlining the business, and swotting up on really boring things like tarriff codes and VAT.
If you are in Europe and are wondering where your order is - don't worry! If you ordered before Monday 21 December, your goods are safely on their way and have already left the UK. If you ordered after 21 December, your goods have not left the studio yet due to the EU blockades on UK goods.
We would like to take this opportunity to wish all of our customers old and new, a merry festive period and a happy and prosperous new year!
We look forward very much to seeing you on the other side!