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How Will Brexit Affect Online Shopping?

11 December 2020 | Editor's Pick | Most Popular | News | Online Shopping | Tips and Guides

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Author: Parcel2Go.com

The Impact of Brexit on eCommerce

The Brexit debate continues to be one of the most analysed and divisive political events in recent times. Brexit happened when the UK left the European Union on 31 January 2020. 

Here's What You Need to Know​- Timeline

  • Brexit happened when the UK left the European Union on 31 January 2020.

  • Boris Johnson says there is a strong possibility the UK will fail to strike a post-Brexit trade deal with the EU.

  • Little has changed from the EU and the UK. This is because both sides agreed many things would stay the same for 11 months, allowing time for leaders to agree on a deal for life after Brexit. 

  • However, time is running out to reach an agreement before the UK stops following the EU trade rules on 31st December 2020.

  • The new trade rules will come into effect on 1st January 2021, if agreed upon. 

What is This Brexit Deal? 

When the UK was in the EU, businesses could buy and sell goods across the EU borders without paying taxes, known as tariffs.

From 1st January 2021:

- There may be some restrictions on certain UK animal food products. For example, some meat products cannot enter the EU unless they are frozen to -18C.

Brexit and Online Shopping

The UK’s annual revenue from online retail and e-commerce is currently more than €150 billion; and with Great Britain accounting for 33% of all online sales in the EU, a no trade-deal has the potential to majorly disrupt current market trends on both sides of the English Channel.

As the largest online market in Europe, the UK has had a leading role in the success of European e-commerce since the rise of online shopping. Equally, the tech boom and the emergence of British e-commerce have evolved hand-in-hand with access to the barrier-free trade EU membership ensures.

Impact on Trade

Is Your Business Importing Goods? 

If you are importing goods from outside the EU, you will need to find out how much tax you need to pay or if you need to get a licence or certificate.

Is Your Business Exporting Goods to the EU? 

You will be required to have an EORI number starting with GB, get an EORI number now.

Making Exporting Easier for Your Business

  • Complete a customs declarations until they end their transit movement

  • Pay custom duties until they end their transit movement.

 

Impact of Online Shopping After Brexit

eBay After Brexit

If you are an avid eBay seller, click here to read Ebay's preparation steps.

Amazon Brexit

You might have heard or be involved with Fulfillment by Amazon (FBA). There are several international programmes, each with different processes for holding and fulfilling your goods. With these programmes, very little is expected to change as it is ultimately Amazon's responsibility to ship the product.

However, if sellers hold inventory in warehouses across the continent, you will now face some tax implications that go beyond the current requirements to register for VAT in the individual country.

Marketplace Fees and Taxes

check the UK trade tariffs from 1st January 2021

Impact on Shipping

  • While leaving has caused imports to the UK to become more expensive, British exported goods have become cheaper to European consumers.

  • For anyone importing commercial goods from outside the EU – including Britain - they will need an Economic Registration and Identification (EORI) number.

  • Now, VAT is now due before goods can be released.

  • This will increase shipping delays and will likely lead to increased costs to account for border control complexities- especially at the UK ports.

  • Courier services will require more information about a parcel’s contents –producing and attaching relevant customs forms and HS codes to accompany the parcel.

  • These extra procedural steps will increase both costs and resource for UK e-commerce businesses.

Relevant Information for Sending Overseas 

Customers sending parcels from the UK to EU countries should be aware of the following:

  • All goods will need customs clearance

  • All senders to EU countries will now be required to complete a commercial invoice and attach a HS code to their parcel to identify the goods

  • Goods sent across EU borders will be liable to duties and taxes

  • Increased procedural requirements will result in delayed transit times

What Has Changed on 1st January 2021? 

  • People planning to move between the UK and the EU to work, live or retire will no longer be able to do so automatically. 

  • The UK will implement a points-based immigration system for EU citizens.

  • As travel rules are changing, check your passport is valid, check your health insurance and that you have the right driving documentation with you.

  • The UK will no longer be making annual payments to the EU's budget.

  • Arrivals from the UK will stand in a different queue at passport control.

  • Businesses who choose to trade within the EU will face a lot more paperwork.