Did anyone solve this??

[R.Anders]

Small UK business holds stock in the UK.

Have a handful of wholesalers in Europe in different countries.

Pre Brexit, put the boxes on a vehicle or plane, job done.

After Brexit, stuck in customs, vat and duties charged + whatever fees the local customs feels like charging.

Those small businesses don't want any of this hassle when they can simply order from a eu based seller.

Bigger companies can form EU entities and/or hold stock in the EU. We can't afford to do that for the sake of 50,000-100,000 per year

What do other people do?

 

[japancool]

After Brexit, stuck in customs, vat and duties charged + whatever fees the local customs feels like charging.

Know your HS codes, make sure the parcel company has them, and use postponed VAT accounting.

 

[R.Anders]

Know your HS codes, make sure the parcel company has them, and use postponed VAT accounting.

It's all done correctly on our end.

Still, customers don't want to pay Duties. Sometimes they don't need to and the local customs office still charges them.

 

[japancool]

Are you talking about receiving goods in the UK, or sending goods to EU customers?

 

[R.Anders]

Sending

 

[DontAsk]

Bigger companies can form EU entities and/or hold stock in the EU. We can't afford to do that for the sake of 50,000-100,000 per year

What do other people do?

In my case things go through (by Royal Mail) with very few issues, both to end customers and distributors. The fact that they will pay VAT and handling is clearly explained up front. I have had zero complaints. I am the manufacturer so they cannot buy elsewhere

Are you saying £50,000 - £100,000 in sales, or packages? At that level can you not afford to send DDP?

 

[LPB 123]

Small UK business holds stock in the UK.

Have a handful of wholesalers in Europe in different countries.

Pre Brexit, put the boxes on a vehicle or plane, job done.

After Brexit, stuck in customs, vat and duties charged + whatever fees the local customs feels like charging.

Those small businesses don't want any of this hassle when they can simply order from a eu based seller.

Bigger companies can form EU entities and/or hold stock in the EU. We can't afford to do that for the sake of 50,000-100,000 per year

What do other people do?

For low value goods you should go for IOSS, and higher value DDP.

You will have access to lower admin fees than the customer would have the other end and just build it in to your price.

 

[R.Anders]

We send boxes. Between 5-15 boxes per delivery. Value of 1500-10000eur.

Sending DDP doesn't make any financial sense. Why would we pay their local taxes? We can't claim that back and we lose 20% margin. And no, we can't increase the price by 20% as then we'll price ourselves out of the market.

 

[LPB 123]

Why would we pay their local taxes?

To get some of the business you're losing to EU businesses. Pre Brexit you would have been paying UK VAT on these sales which you no longer have to so you're saving there so I don't think it would be 20% increase unless you have high duty items.

Those small businesses don't want any of this hassle when they can simply order from a eu based seller.

By offering DDP you're making it more appealing to them the other side as they don't have any of the hassle of importing. If you're losing sales to local businesses it could be worth a try doing DDP?

 

[DontAsk]

Sending DDP doesn't make any financial sense. Why would we pay their local taxes? We can't claim that back and we lose 20% margin. And no, we can't increase the price by 20% as then we'll price ourselves out of the market.

Your complaint is things weren't wrong post-brexit.

Pre-Brexit you were charging all customers 20% UK VAT.

Now you don't want to increase your export same price (which excludes UK VAT) by a roughly equivalent amount.

It's not Brexit that is the problem.

 

[R.Anders]

Before Brexit I didn't charge vat..it did go as EC sales but that would offset against my vat expenses and balance out. Now it doesn't balance out because sending DDP is just an expense, that taxes paid so not balance out with my vat expenses.

 

[LPB 123]

Before Brexit I didn't charge vat..it did go as EC sales but that would offset against my vat expenses and balance out. Now it doesn't balance out because sending DDP is just an expense, that taxes paid so not balance out with my vat expenses.

But with the EC sales did you actually take off the VAT from the listed UK price? Or did you just get their VAT number and invoice at the full amount still? i.e pocketing the VAT element as an extra margin for yourself?

You have a choice, continue as you're doing which you say your customers are put off by or trying something different.

 

[R.Anders]

So, are you saying I should offer them DDP and add 20% on the price? And they would hopefully agree because they won't pay tax on their end?

They might but it's not a good solution for them as they can't offset that payment against their vat earnings either.

Not charging them 20% when shipping DDP isn't viable from a margin perspective.

That is a Brexit issue indeed. The fact that my customers even need to deal with any of this, or us

 

[R.Anders]

It will be cheaper to spend £5k, form an EU entity and use it as the importer and reclaim the various tax charges I think than to "swallow" 20% in taxes from a 50-100k sales/year

 

[DontAsk]

Before Brexit I didn't charge vat..it did go as EC sales but that would offset against my vat expenses and balance out.

But you were VAT registered? Who paid the VAT?

 

[LPB 123]

So, are you saying I should offer them DDP and add 20% on the price? And they would hopefully agree because they won't pay tax on their end?

They might but it's not a good solution for them as they can't offset that payment against their vat earnings either.

Not charging them 20% when shipping DDP isn't viable from a margin perspective.

That is a Brexit issue indeed. The fact that my customers even need to deal with any of this, or us

I think your straight figure of 20% is not correct.

Pre Brexit -

UK sale = £1000 + VAT
EU sale using EC Sales List = £1000 no VAT.

Post Brexit -

UK sale: £1000 + VAT = £1200.
EU sale: £1000 + Duty + admin fee + local VAT = X

I will give you an example for our duty rate and our courier admin fee for our item to show the costs to France which is also 20% VAT.

EU sale: £1000 + 2.7% + £4.30 + VAT = £1237.56

So for us we don't have to increase prices by 20%, you only have to increase prices by 3%. Obviously duty rates vary so that will change your calculation but I think your straight 20% increase isn't totally correct.

Do your own calculations and work out if it makes sense, but obviously if things aren't working it could be worth trying something different?

 

[R.Anders]

I think your straight figure of 20% is not correct.

Pre Brexit -

UK sale = £1000 + VAT
EU sale using EC Sales List = £1000 no VAT.

Post Brexit -

UK sale: £1000 + VAT = £1200.
EU sale: £1000 + Duty + admin fee + local VAT = X

I will give you an example for our duty rate and our courier admin fee for our item to show the costs to France which is also 20% VAT.

EU sale: £1000 + 2.7% + £4.30 + VAT = £1237.56

So for us we don't have to increase prices by 20%, you only have to increase prices by 3%. Obviously duty rates vary so that will change your calculation but I think your straight 20% increase isn't totally correct.

You are right, it's not exactly 20%. In your case it's 23%. From the customers perspective, you are charging them more, or similar if they were to pay their local taxes but now they can't offer those £200. It's just a cost. Much less appealing

 

[LPB 123]

But you were VAT registered? Who paid the VAT?

No one from memory It worked kind of like a reverse charge.

So sale before to UK £100 + VAT = £120.
EC sale before would be £100 EC sale.

You had to submit a monthly EC sales list and customers would mark it on their VAT return EC purchases. So it was just cancelled out.

 

[DontAsk]

No one from memory It worked kind of like a reverse charge.

So sale before to UK £100 + VAT = £120.
EC sale before would be £100 EC sale.

You had to submit a monthly EC sales list and customers would mark it on their VAT return EC purchases. So it was just cancelled out.

VAT has to be levied somewhere, even if no cash changes hands. The notional import VAT was offset against their output VAT on their return. Now, some cash has to change hands but the eventual result will be the same, apart from a small increase to cover the processing fees.

 

[LPB 123]

You are right, it's not exactly 20%. In your case it's 23%. From the customers perspective, you are charging them more, or similar if they were to pay their local taxes but now they can't offer those £200. It's just a cost. Much less appealing

I'll be honest I don't think I fully grasped your situation as we're mostly B2C. From your info I think it's actually better for your customers for you to ship DDU as at least then they can claim back the import VAT. But your customers are put off by this for the hassle.

It may be worth exploring the EU entity and working out costing etc to make it viable for you.

 

[R.Anders]

I was hoping to hear from someone here who can relate, and has solved this. Hence the title of this thread.

 

[DefinitelyMaybeUK]

Yes, it's all pants ?

Have a handful of wholesalers in Europe in different countries.

Just to clarify, presumably all your wholesalers are VAT registered? If so, then I agree, DDP isn't for you as they'll never be able to reclaim the VAT.

Do they all have an EORI number? In France, at least, it's mandatory for last 18 months, such that VAT registered businesses should now use postponed VAT accounting, so that just leaves duties and handling fees to deal with..

While they'll get duties charged if they apply, if your items actually are UK origin and the correct preference statement is in place, then no duties should be levied.

On the handling fee side, oddly (or not) the only shipper we've imported into the UK post Brexit where a) stated preference has actually been followed (hence no charges) and b) no handling has been charged either, is Fedex (aka TNT) - on both both pallets and parcels (all delivered by same Fedex guy!) - not the cheapest I agree, but maybe it's a case you get what you pay for. Normally a pallet cleared via an independent is an instant £60 fee regardless.

 

[R.Anders]

While they'll get duties charged if they apply, if your items actually are UK origin and the correct preference statement is in place, then no duties should be levied.

In theory, you are right. In reality, that's not the case. Also, there are admin fees, time lost in customs, back and forth from them to the customs authorities, etc. They are not used to it, and don't want the hassle.

 

[japancool]

Find a 3PL company in Europe, and ship your stock directly from your European wholesalers there, and fulfil the orders from there. You'll have to maintain separate stock for your European and UK customers.

 

[R.Anders]

Find a 3PL company in Europe, and ship your stock directly from your European wholesalers there, and fulfil the orders from there. You'll have to maintain separate stock for your European and UK customers.

We considered that but it's too small for that and we don't know what stock they will order. Splitting the stock will create absolute chaos at our size. Tell me again this is not a Brexit problem LOL

 

[thetiger2015]

We considered that but it's too small for that and we don't know what stock they will order. Splitting the stock will create absolute chaos at our size. Tell me again this is not a Brexit problem LOL

It is but Brexit isn't going to undo itself anytime soon. So, realistically, you either hold some stock within the EU at a fulfilment centre/warehouse or you re-work the shipping. There's nothing else you can actually do.

A business we dealt with had the same issue, the UK is now a separate entity for shipping and taxation. They had to set up a .eu website and have a warehouse in Germany. So, our EU customers stock is shipped from there and our UK orders are fulfilled by the UK warehouse. That was the only way they could get round the paperwork issue, instead of doing lots of forms for each individual parcel.

There is no quick way of solving it. If you're EU orders are too small/complicated for fulfilment then discussing something with your courier is probably best, if you can ship everything with the same courier and make all of the documentation templated, it will speed things up a bit on the admin front.

Unfortunately, there's no requirement for EU countries to offer any sort of help or speed up processing of parcels from the UK. We are now treated the same as any other non-EU nation. That's sovereignty and bloo passports

 

[R.Anders]

It is but Brexit isn't going to undo itself anytime soon. So, realistically, you either hold some stock within the EU at a fulfilment centre/warehouse or you re-work the shipping. There's nothing else you can actually do.

A business we dealt with had the same issue, the UK is now a separate entity for shipping and taxation. They had to set up a .eu website and have a warehouse in Germany. So, our EU customers stock is shipped from there and our UK orders are fulfilled by the UK warehouse. That was the only way they could get round the paperwork issue, instead of doing lots of forms for each individual parcel.

There is no quick way of solving it. If you're EU orders are too small/complicated for fulfilment then discussing something with your courier is probably best, if you can ship everything with the same courier and make all of the documentation templated, it will speed things up a bit on the admin front.

Unfortunately, there's no requirement for EU countries to offer any sort of help or speed up processing of parcels from the UK. We are now treated the same as any other non-EU nation. That's sovereignty and bloo passports

Another solution is to have an EU vat entity maybe

 

[Customs Geek]

I was hoping to hear from someone here who can relate, and has solved this. Hence the title of this thread.

There is really no easy fix or solution .
Customs declarations , their associated completion costs , and duties were all an inevitable part of leaving the EU. No trade agreement would ever removed that requirement.

What is an unusual consequence is that EU companies don’t want to be involved in the import process when receiving goods from the UK and expect the seller to do everything.

The legislation for customs in both the EU and UK is all geared to the resident buyer being the importer and being able to account for duties and taxes.

Whilst it is legally possible for a non EU business to import into the EU they must use an indirect customs representative to import on their behalf and possibly a fiscal rep to act for their VAT affair's. There are some customs reps willing to do this but they are few and far between as they are on the hook for taxes and duties so are expensive.

 

[R.Anders]

There is really no easy fix or solution .
Customs declarations , their associated completion costs , and duties were all an inevitable part of leaving the EU. No trade agreement would ever removed that requirement.

What is an unusual consequence is that EU companies don’t want to be involved in the import process when receiving goods from the UK and expect the seller to do everything.

The legislation for customs in both the EU and UK is all geared to the resident buyer being the importer and being able to account for duties and taxes.

Whilst it is legally possible for a non EU business to import into the EU they must use an indirect customs representative to import on their behalf and possibly a fiscal rep to act for their VAT affair's. There are some customs reps willing to do this but they are few and far between as they are on the hook for taxes and duties so are expensive.

I would happily pay admin fees and even the customs fees, problem I can only do that via DDP and then I have to pay their local taxes too which makes it unachievable. If there was a way for us to pay duties and admin on the importers behalf that would solve some of the issues.

Sigh

 

[Customs Geek]

Of course you can arrange the import and pay on the importer’s behalf if that’s what you want to do . The customer can agree to be the importer as they are EU residents they can also get the VAT back .
No one even the customs authorities cares who pays for what so long as someone does.
You would just need to sort it out in your contract and with the carriers/ customs agent.

 

[R.Anders]

I meant that I am happy to deal with the import and pay the admin + duties on their behalf. They don't want anything to do with this. They don't want to hear it's stuck in customs, that they need to pay something (even if I reimburse them). Like you said, it's the lack of desire to deal with international commerce when it comes to the UK

 

[JEREMY HAWKE]

You can be exporting to the EU by the book without any mistakes but buying from the UK now is a red light to EU customers no matter how good you
Move to the EU
Personally my choice would be Greece

 

[DontAsk]

What is an unusual consequence is that EU companies don’t want to be involved in the import process when receiving goods from the UK and expect the seller to do everything.

I haven't found that, but I only supply to smaller businesses. Maybe there's a difference.

You can be exporting to the EU by the book without any mistakes but buying from the UK now is a red light to EU customers no matter how good you

My sales to the EU have picked up recently. I think customers are getting used to the new regime and are more confident that it's (almost) business as usual.

 

[JEREMY HAWKE]

I haven't found that, but I only supply to smaller businesses. Maybe there's a difference.


My sales to the EU have picked up recently. I think customers are getting used to the new regime and are more confident that it's (almost) business as usual.

I think its because you are a highly skilled and dynamic sales person

 

[DontAsk]

I think its because you are a highly skilled and dynamic sales person

If only...