Brexit and importing (again)

[japancool]

One of my European suppliers has set up a company in the UK. They are proposing to invoice us from the UK entity. Goods will still be fulfilled by their European warehouse.

For the life of me, I'm failing to see any benefit to this arrangement whatsoever. First, because they are invoicing from a UK entity, we will have to pay VAT up front, rather than using PVA, which affects cashflow.

I'm assuming they will put their name down as the importer of record with their EORI number, and our address as the delivery address. That seems fraught with opportunity to go wrong, as we won't be able to deal with the freight company directly.

While they'll bill us in pounds, I'm not sure what exchange rate they'll use. We normally pay by Wise, or use a 0% commission credit card to pay, which gives us pretty close to the mid-market rate.

Anyone think of any benefits to this arrangement?

 

[MikeFoulds]

Hi @japancool, the above arrangement is to benefit them, because they can then delay payment of the VAT to HMRC, control the exchange rates used, and move stock from locations which suit them without needing to make you aware of where the stock is coming from.

Unless they are physically holding stock in the UK, to allow rapid delivery when you need, developing into a permanent stock holding in the long run, there is no benefit to you that I can see.

 

[Customs Geek]

It is most likely to do with being able to supply UK customers who don’t want to be bothered with any import requirements. They may have lost UK customers post Brexit.
Any purchase from the new UK company will probably be the same as purchasing from any other UK based supplier. Ie they will charge supply VAT.

It will also enable them to act as UK importer using a direct customs rep which is usually cheaper and easier to find. It’s pretty common for the importers details and delivery address to be different so provided they provide the customs intermediary with the correct details it shouldn’t be a problem.