With a deal now in place UK retailers exporting to the EU have clear procedures they need to follow. To keep things moving as smoothly as possible we have been working closely with our partners to ensure we understand what information is required and that we can transmit it as cleanly and effectively as needed.
From the 1st January 2021 the UK and EU agreed a zero tariff, zero quota trade deal meaning trade between the UK and EU can continue without companies incurring additional costs from tariffs.
The team here at Pro Carrier are extremely experienced in managing cross border logistics, working with partners and customs agents globally, managing various customs incoterms and dealing with the complexities of duty/tax payments. If you have any questions please do not hesitate to contact us.
We have listed out below the new processes you will be required to follow when exporting to the EU.
The key to allowing Pro Carrier to manage a seamless transition, is data. At Pro Carrier, we send parcels all over the world every day so already have a wealth of knowledge with dealing with the complexities of cross border delivery.
If you have only ever delivered to the EU, here is how we can help:
Pro Carrier will facilitate exports out of the UK and imports into the country of destination. In order for us to do this, we will require the following information from you:
All you need to do is pass this to us in the data files you send and we will take care of the rest. This data is mandatory and without it we cannot make the necessary entries.
The accuracy of that data is really important as inaccurate data can lead to:
It’s worth noting for us to carry out this work we will require you to provide your VAT number and GB EORI number; an EORI number is now required to be declared if exporting from the UK to any destination worldwide – for more information or to apply for an EORI number, please visit https://www.gov.uk/eori.
Typically this process can take up to two weeks.
If you have any questions on the data requirements or would like to understand how Pro Carrier can help with your cross border deliveries, please do not hesitate to contact your account manager or fill in the form at the bottom of this page.
When exporting to the EU, if the country of origin/manufacture is declared as UK or an EU member state, there will be no duty to pay for goods under the value of €500. VAT will be charged regardless of the value declared
If the country of origin/manufacture is declared as anything other than UK or EU then the duty, if applicable for the commodity being shipped, will be levied and be subject to the b to c long distance selling thresholds. The low value threshold for VAT is currently €22 and €150 for duty. The duty element will be based on the rules of origin and any Free Trade agreements that may be in place between the country of origin/manufacture and the EU.
When talking about country of origin/manufacture, we are not referring to the shipper country, but to where the items being shipped are classed as being manufactured or originated from.
There are two elements of VAT:
UK sales VAT – levied by the UK HMRC for goods sold in the UK for use/consumption in the UK
Import sales VAT – levied by the country in which the items are being bought
Goods that are sold from the UK for consumption outside of the UK are UK VAT exempt (zero rated) however will be liable for VAT by the country into which it is being exported to. From now goods now sold ex UK into the EU will not be subject to duty if valued below €500 Euros however will be subject to in country sales VAT upon import.
Pro Carrier offers two main choices for facilitating how the duty and tax can be managed:
So, based on what our customer’s aspirations are, what they are shipping and the value of their products being shipped, Pro Carrier is perfectly positioned to provide sound advice and solutions.
We always recommend customers to seek confirmation of how best to handle VAT from their tax experts and HMRC.
From July 2021 the 15 Euro VAT customs threshold into the EU will no longer be available. From Jan 1st the threshold for material coming into the UK also disappears and importers to the UK will be responsible for making VAT returns to HMRC, therefore will have to register for VAT in the UK. It is likely that from July 2021 the same rule will apply to those importing into the EU – watch this space!
At Pro Carrier we have been working hard behind the scenes to see how we can help minimise any possible disruption and mitigate any risk for our customers who already deliver into the EU. We have also thought long and hard about how we can continue to support our customers who want to expand their customer base into Europe and beyond.
How can we help?
We firmly believe that Pro Carrier is equipped to take on the challenge of Brexit, utilising the systems, networks and experience we have developed and introduced specifically to make shipping cross border simple and easy.
If you are reading this paper we have passed that momentous moment and are now in a brave new world. For us living and breathing ecommerce, this has had a seismic impact on how we trade and how we operate within the EU. What we want to achieve in this document is to make sense of what this all means to us and to demonstrate how Pro Carrier has worked hard to adapt to the new rules when trading within the EU.
So what does Brexit mean for the UK and for those other countries that are shipping ecommerce from outside the EU in to the one of the remaining 27 member states that make up the EU – Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden?
Today, and up to July 1st 2021, we will enjoy the advantages of the low-value and medium-value rules for imported goods, referred to as the B to C system. This means there is no liability for duty and tax for parcels being shipped to an individual if the shipment value is below 22 Euros (£15 GBP). For shipments valued above 22 Euros but below 150 Euros (£135 GBP) they are liable for VAT. Anything above 150 Euros will also incur duty charges. There are a few exceptions to these rules, such as if you are shipping alcohol, where there would be a requirement to account for excise duty.
As an ecommerce seller today you will have to register for VAT in each country where your annual sales exceeded the limit for that destination (https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/vat/ traders/vat_community/vat_in_ec_annexi.pdf)
However the EU Tax department considers this B to C system unfair, since it puts traditional brick and mortar retailers at a disadvantage as they have to pay VAT on all imports and have to charge VAT at the point of sale. Whereas companies sending low-value orders as an online retailer cross border, there is no VAT to be considered at the point of sale.
To ensure that VAT is recognised at the right rate and that the National Tax Departments of the member states where the consignee/recipient/consumer resides are getting their VAT, the rules change on July 1st 2021. The EU recognized that buying online has become a mainstay for consumers in the EU, so the new rules whilst evening the score around VAT has also ‘simplified’ the VAT registration and payment process for online sellers retailing to individuals in the EU.
Our dynamic team are on hand and excited to work with you.