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How European companies adapt to Brexit

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By: Victoria BissetBBC News

Image copyright Getty Images

Almost two months have passed since a free trade agreement with the EU went into effect after Britain’s Brexit.

The new rules require European companies to pay the UK Sales Tax (VAT) directly for sales less than 135 (155, $190), so they now have to register with the UK authorities and file a quarterly declaration.

Other changes include customs declarations and additional documents. If so, how have they adapted so far and how has the change affected them?

Laurent Caplat, founder of French online grocery store BienManger.com

BienManger received final orders from the UK on December 18 and shipped before the new regulations went into effect on January 1. It is unclear whether and when services will resume in the UK.

image copyrightBienmanger.com Image caption Laurent Caplat says you should take time to evaluate the cost and changes before deciding on the next step

We operate an e-commerce deli that sells a selection of fine foods in France, Europe and around the world. About 20% of orders are made outside France.

The UK market isn’t the center of our business, but our UK customers were looking for these products and were willing to find them on our website.

Even in November and December, it was a bit vague about what would happen in Brexit and what the rules would be. Now I have heard of the new procedure for sending parcels to the UK, but it is not yet clear.

We still have relationships with some UK producers and we sell UK and UK products on our website. I have a customer in the UK calling “I used to order this product on your website, where can I find it?”

It’s fun to start reselling in the UK, but you’ll have to spend more time trying to better understand the changes and costs involved. The question we have is, is it worth implementing all these solutions for the small business we are working with in the UK?

It’s hard to comment on Brexit from my point of view. Everyone will adapt and adapt. I know we had this free market and it was so easy to do business all over Europe and it is more difficult now.

Thomas Leppa, co-founder of Finnish online wall sticker design company Made of Sundays

The company was founded about three years ago and has continued to be sold to the UK since Brexit.

image copyright Made of Sundays Image caption Made of Sundays says that most of its sales are made through an online marketplace that adds VAT to the price.

We are a small business, but about 20% of our exports go to the UK.

The most practical thing is the confusion between customers. Many people don’t understand how the system works. People think that if you order more than 135, you don’t have to pay any taxes at all, so I have to explain that the more you buy, the more you have to do.

With more than 135 purchases, the customer has to pay VAT once the product arrives in the UK.

In online shopping these days, people expect free shipping, but with Brexit it is quite expensive and you have to pay for it. If you use the courier service, you have to file customs declaration, which is an additional cost of about 5 (4.30) for each package.

What I don’t know yet is how complicated and how much of a tax filing for the UK is. Luckily, a large portion of UK sales go through the marketplace Etsy and from there they add UK VAT to the price.

But the biggest problem for us is accounting. It is another country where we need to check all taxes and get the correct amount against the Finnish tax authorities. It needs a little more work in that sense, but otherwise it’s going pretty well, so I didn’t think about selling it to the UK, at least for now.

Dorte Randrup, Export Manager for Clothing Brand N Denmark

The company faced a month of chaos, but delivery to UK suppliers is now back to normal.

image copyrightNu Denmark

I think the UK is the fourth or fifth largest country we work with.

We sent some stock to distributors in the UK and Ireland before Brexit, but after a month or so we were unable to deliver.

We had to wait for the VAT number to make sure everything was correct in the system under the new customs regulations, but the company helped us handle it properly.

The UK distributor managed contact with customers, but it’s mid-season and the impact wasn’t too bad due to UK closures.

You can now ship across the UK.

Harald Mcke, owner of German online store Spielmaterial.de, sells board game parts

The company has stopped selling direct to hundreds of private customers in the UK due to VAT regulations.

Image copyrightSpielmaterial.de

I have considered getting a VAT code so I can send small items to the UK, but it takes too much work. So, if your order is less than 135, you cannot send it to private clients in the UK.

I have some B2B clients, they are not affected, but all small clients are gone. There are 400-500 UK customers who can no longer serve you, so you are incurring losses here.

For orders over 135, all UK customers are much more expensive as they have to pay customs duties and some fees. DHL, for example, charges a fixed fee of 12 per parcel.

You can sell to individual UK customers through platforms like Etsy and eBay. Then you need to collect UK taxes on the platform. But you have to pay the initial cost, which is expensive. We have 10,000 items so we have to pay 10,000 times a fee, which is something we don’t want to do. So customers can’t buy everything.

In addition, we need to update our online store system to adopt a VAT system that costs thousands of euros and shipping to the UK. This is the only country in the world that handles taxes in this way and this is a major problem. It’s a personal affair in the UK and anywhere in the world.

Online Eastern European Grocery Store Europa Fresh, British Owner Bal Loyla

The company launched just before the UK’s first shutdown in 2020, but has now stopped shipping to Northern Ireland and Europe.

We’re still growing into business, but now it’s oppressed.

The idea was to start exporting more. We get a lot of inquiries knowing our customers are there. But that’s what we’ll have to put on the burner again until things get easier and clearer.

We were advised by the delivery man to no longer transport food to Northern Ireland.

Media caption What is the deal between Northern Ireland and Brexit?

Then in Europe there are a lot of problems with the order, as it requires a lot of paperwork. You must detail every single product included in the order. Sometimes the order has up to 50 to 100 items, which takes too much time.

We’re just a small business, so it’s not worth the headache.

We imported from European wholesalers, but now we have to use a company in the UK. As long as a supplier in Germany is currently using a customs broker, it is no longer worth importing as it adds cost to each shipment. costs.

Margins are cut by almost half as you have to pay the broker before making any income and savings. Unfortunately we have to pass the extra cost to our customers.

It’s only been 7 weeks since Brexit started and prices have gone up, but for now it’s hard to say exactly how much it will affect us in the long run. I think we need more guidance for small businesses like us.

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