My Business Can't Survive This Mess - BREXIT

Discussion in 'International Business' started by Confused!!, Mar 19, 2021.

  1. Confused!!

    Confused!! UKBF Newcomer Free Member

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    I assume I'm not the only person in this position, I have a small online business selling goods primarily to EU customers. It was a big relief to me initially when a 'Free Trade Deal' was done at the last minute with the EU. (I'm still baffled as to why an extension wasn't put in place while the world deals with the pandemic).

    Fast forward to the reality & despite preparing for the new customs & shipping requirements for sending our products to the EU (obtaining custom codes, EROI number etc) our customers are not receiving their orders without paying additional duty charges in their countries. Our goods are supposed to be free of duty!

    An average order value for us is approx. £48, our customers are being asked to pay as much as 26 euros to receive their orders!

    Customers are already waiting weeks before they find this information out & they are not accepting their orders, understandably.

    The upshot of all this is, we are having to refund customers, we are losing products & losing customers fast!

    Our business has survived decades, provided for a family of six during this time & we've always managed to maintain a profitable business. This appears to be over now & directly as a result of a shambolic exit from the EU.

    What are families like ours suppose to do now? Our income is dwindling fast & it will soon no longer be viable to continue!

    Thanks Boris, trust your family & friends are prospering through this!
     
    Posted: Mar 19, 2021 By: Confused!! Member since: Mar 19, 2021
    #1
  2. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

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    I can understand and sympathise if you moan about the courier service, but the vat and import costs should have been known to you far earlier and sorted out.

    Do you not have UK sales you can increase
     
    Posted: Mar 19, 2021 By: Chris Ashdown Member since: Dec 7, 2003
    #2
  3. MBE2017

    MBE2017 UKBF Ace Free Member

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    The other potential alternative might be to set up a distribution company in the EU, warehouse the goods and despatch from there.
     
    Posted: Mar 19, 2021 By: MBE2017 Member since: Feb 16, 2017
    #3
  4. japancool

    japancool UKBF Big Shot Free Member

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    Yes, they are. They're not being charged duty. They're being charged VAT and courier charges.

    Frankly, it's your own fault if you didn't understand what a free trade deal meant.

    Try expanding your horizons and looking beyond the EU.
     
    Posted: Mar 19, 2021 By: japancool Member since: Jul 11, 2013
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  5. Mr D

    Mr D UKBF Legend Free Member

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    Well as Brexit has already happened you need to look at solutions in the EU. You've had almost 5 years to figure out what to do - get it done.

    Oh and who told you the goods would be free of duty?
     
    Posted: Mar 19, 2021 By: Mr D Member since: Feb 12, 2017
    #5
  6. NickGrogan

    NickGrogan UKBF Ace Full Member

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    The exit from the EU went fairly well; It could have been a lot worse.

    You've had 5 years to get ready, what preparations did you make during that time?
     
    Posted: Mar 19, 2021 By: NickGrogan Member since: Nov 15, 2012
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  7. japancool

    japancool UKBF Big Shot Free Member

    4,401 909
    Remember how, when before Brexit, you used to send stuff to Norway or Switzerland, you didn't charge UK VAT and had to prepare paperwork, and then when your Norwegian or Swiss customers received their goods, they had to pay import customs charges?

    Well, that's exactly what's happening now to the whole of the EU. It's not hard to understand.
     
    Posted: Mar 19, 2021 By: japancool Member since: Jul 11, 2013
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  8. Interestedobserver

    Interestedobserver UKBF Ace Free Member

    1,963 309
    What do you sell?
     
    Posted: Mar 19, 2021 By: Interestedobserver Member since: Apr 15, 2020
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  9. Paul Norman

    Paul Norman UKBF Ace Free Member

    3,277 1,078
    You are certainly not alone. The deal, of course, was struck on literally the last day, meaning that you did not have 4 years to prepare.

    However, as you will have read above, British people don't actually have any empathy with you, and are not going to give constructive advice.

    A number of my suppliers have broadly come across the same thing in reverse.

    I empathise with you.

    But this is not the forum for constructive advice. Here we must sing Rule Britannia and mock your lack of preparedness. No help.

    However, you will find help elsewhere. It very much is possible to continue your business, albeit with some transportation delays. This forum, though, is not the place.
     
    Posted: Mar 19, 2021 By: Paul Norman Member since: Apr 8, 2010
    #9
  10. Paul Norman

    Paul Norman UKBF Ace Free Member

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    We are planning to resume sending deliveries to EU customers shortly. But we are devising a different approach, including making them aware that VAT will be collected at 'their end'.
     
    Posted: Mar 19, 2021 By: Paul Norman Member since: Apr 8, 2010
    #10
  11. Paul Norman

    Paul Norman UKBF Ace Free Member

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    In addition, we are moving the main distribution to an EU location, That will essentially remove any issues for us.
     
    Posted: Mar 19, 2021 By: Paul Norman Member since: Apr 8, 2010
    #11
  12. Mr D

    Mr D UKBF Legend Free Member

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    A WTO deal was one of the options prior to the vote. It was the one best known to businesses for the entire 4 years as an option - admittedly a worst option.
    May well have been some businesses that were convinced a deal that exactly matched what we had in 2015 would be struck, however even they should have been planning for what happens if its not.

    The deal we ended up with has some similarities to WTO deal.

    If it came as a shock - is that down to government for poor communications or down to businesses that did not want to consider any change could happen?
     
    Posted: Mar 19, 2021 By: Mr D Member since: Feb 12, 2017
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  13. Paul Norman

    Paul Norman UKBF Ace Free Member

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    My comment arose from the fact that on this forum, instead of empathising and offering advice, the question is receiving mainly 'you should already know the answer'.

    Which kind of makes this forum of zero value on this issue.

    A LOT of businesses are struggling. The change of relationship with the EU is a big one.

    I would suggest that the OP might benefit from attending a seminar, such as this one. Other seminars are obviously available.

    https://www.sendcloud.co.uk/shippin...gq6R8oUut1lv9DZirbNGAAjePywcGqjwJ44ovf5oH3Tdk
     
    Posted: Mar 19, 2021 By: Paul Norman Member since: Apr 8, 2010
    #13
  14. gpietersz

    gpietersz UKBF Ace Full Member

    1,992 481
    We have known since 2016 that it was a possibility we would leave the customs union.

    We have known from mid 2019 that it was probable.

    It is not. Posting here is unfortunately for the think skinned. :(

    The OP did not ask for advice: he did not ask anything unless you did not count rhetorical questions. He was complaining. He does not even give us much information: what he is selling, whether his customers are consumers or (VAT registered) businesses (so who paid VAT and when previously), what courier he is using etc.
     
    Posted: Mar 19, 2021 By: gpietersz Member since: Sep 10, 2019
    #14
  15. Mr D

    Mr D UKBF Legend Free Member

    28,175 3,470
    You mean besides the helpful ideas like basing out of EU to deal with EU? Or looking beyond the EU for customers?
     
    Posted: Mar 19, 2021 By: Mr D Member since: Feb 12, 2017
    #15
  16. Darren_Ssc

    Darren_Ssc UKBF Ace Free Member

    1,925 687
    One of the many one-post wonders who, somehow, manage to get a lot of responses and are never seen again.

    A cynic might connect the frequency of such posts with the apparent lack of real content elsewhere?
     
    Posted: Mar 19, 2021 By: Darren_Ssc Member since: Mar 1, 2019
    #16
  17. japancool

    japancool UKBF Big Shot Free Member

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    If you want sympathy, there are charities and social workers for that.

    Regardless of a deal or not, all these issues with VAT would have still been there. The rules for sending goods into the EU have been there for ages - in fact, if you have ever imported ANYTHING from a non-EU country, you would have been on the other end of those rules. So you cannot say that business could not have prepared.

    If you had let your customers know that they would be charged VAT on import, and that your prices now exclude VAT (and are therefore 16.66% cheaper) for non-UK customers, you could have built up expectations ahead of time. If you didn't, there's only one person to blame for that.

    B2C is not that hard to understand. You don't charge VAT to your non-UK customers and it's collected when they receive the goods., plus a standard courier handling charge As a certain advertising slogan would say, simples!
     
    Posted: Mar 19, 2021 By: japancool Member since: Jul 11, 2013
    #17
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  18. Jeff FV

    Jeff FV UKBF Big Shot { Moderator }

    3,758 1,793
    I will be honest - I don’t understand all the intricacies and details of trading with the EU, and I am glad I don’t have to. (Closed our business a few years ago)


    But I have question, no hidden agenda, just genuinely trying to understand and increase my knowledge.

    in this post, and other similar posts, the suggestion is often made to set up a distribution centre in the EU. I can see how this would be beneficial for the individual business, but how is this beneficial for U.K. plc? It seems to me this means moving jobs etc. from U.K. to the EU, which can’t be a good thing for the U.K.? So the opposite of a Brexit benefit?

    As I say, my knowledge is limited, and I would be delighted if someone could explain how moving all this stock from U.K. to EU benefits us collectively.
     
    Posted: Mar 19, 2021 By: Jeff FV Member since: Jan 10, 2009
    #18
  19. japancool

    japancool UKBF Big Shot Free Member

    4,401 909
    If you're a manufacturer, it's still of benefit to the UK, as the goods are still being made here, and the profits are accrued here.

    If the legal entity is in the UK, the second part still applies, that is the say, the profits are being accrued here.

    All of this really goes away when the One Stop Shop comes in.

    But what is not being made clear is that sellers into the EU are not at as much of a disadvantage as is being made out. Your prices didn't just suddenly get 20% more expensive, because you're no longer charging UK VAT, therefore your prices just came down for EU customers (and then go back up when they pay import VAT). Where they are being stung is the handling charge that the parcel delivery companies charge.

    But loads of overseas sellers still sell successfully into the UK and the EU despite all of that.
     
    Posted: Mar 19, 2021 By: japancool Member since: Jul 11, 2013
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  20. Paul Norman

    Paul Norman UKBF Ace Free Member

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    It does depend on the business, of course. My business used to receive items from various locations. None of them were made in the UK. My customers were also in various locations - a very significant number in the EU.

    If I distribute from the EU, you are correct. Some jobs will have moved from the UK to the EU. I will also set up a company in the EU, which will pay taxes in the EU.

    If I were to then import goods from the UK, that, of course, would put some money back into the UK. That is not very likely in my industry.

    Because of the above, I will also move my other business to the EU, and myself. All of which is just logistical common sense, and overall, Brexit will have caused me no more than a momentary inconvenience.
     
    Posted: Mar 19, 2021 By: Paul Norman Member since: Apr 8, 2010
    #20