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.