Brexit & Ecommerce: 6 things to know if you want to sell in the UKBlog
June 22, 2021
As of 31st January 2020, the United Kingdom officially ceased to be a member state of the European Union, and as of 1st January 2021 – after much "back and forth" about whether or not an agreement could be reached and which one was mutually beneficial – Brexit officially came into effect.
Thus, the United Kingdom has left the European podium in terms of online shopping to Germany, but not without having established a set of rules for those selling on ecommerce platforms.
But what are the essential things to know if you decide to set up shop in the UK?
First of all, in order to sell via an eCommerce platform in the UK, you need a UK VAT number.
With the end of open borders, even with pre-established agreements, goods no longer circulate as freely as before, and there are customs controls – meaning a less fluid and slower flow of vehicles and people. The consequence is longer delivery times for parcels that have to cross the border in both directions.
Not only are returns likely to be delayed for a long time, but there is also a risk that on a package that has already been sent and taxed at customs you may have to pay back duties once it is sent back. It is therefore essential to be very clear about your policy and to anticipate, thus deciding whether or not to bear the costs of the return.
Operators shipping to the UK must charge VAT on orders under £135 (approximately €147). For orders above this amount, VAT is charged to the buyer in the UK.
The EORI – Economic Operator Registration and Identification – is the mandatory code for passing through customs. It is used for electronic tracking of customs activities and identifies the registration and identification number of economic operators. Anyone trading to or from the UK must have one, otherwise you could face detention, fines or seizure of your cargo.
CostsDistribution and shipping costs increase. VAT and customs duties are factored into the buying process, so make sure you provide your buyers with all the additional information they need – such as shipping requirements and transactions with the UK – be clear about prices, and state the final price from the outset.
In general, there are many other things to know when approaching this market, some of which are still being considered. Ideally, you should follow all developments between these two former Union partners step by step, which is necessary but requires some effort on the part of the brand. Alternatively, it is possible to rely on a professional partner such as Go Global Ecommerce, which knows all the complexities of cross-border trade and offers tailor-made solutions and tools to deal with the variables – including tax and administrative ones – of different markets.