Post-Brexit: Importing/Exporting to the EU - Questions

[Foulounoux]

As someone who has been working on a Brexit plan for work over the last 12 weeks some observations 

 

We operate a pan European trading company so have had additional factors to consider and currently wish we were a simple UK based trader

 

 

First remember the deadline is 2300 on the 29th for the UK...remember theyre an hour ahead of us

 

If shipping to EU countries at the end of March you need to get goods into Europe before that deadline so in many cases last shipping date will be much earlier especially as its month end,quarter end and for many financial year end so pressured to ship everything will add pressure

 

To import,export you need an EORI number Apply asap on line

 

Duties.  We currently use the 3rd party duties for imports from non EU countries

There are many sites where you can look up the tariff code and duty  the Government Trade Tariff is my reference

Tariff codes are 8 digit for export paperwork but 10 for import   (my German colleagues have to use 11)

 

Transaction Costs

Typically you will need to do export declaration and customer does import declaration  (we will be doing both as intercompany sale)  costs vary up to £50 per shipment 

One way to reduce is to consolidate shipments for a destination 

 

For example we ship 20 pallets a day and 50 parcels to EU

So 70 clearances a day could cost us £3500 on export and similar on import

 

However after discussing with our carriers we can consolidate these individual shipments into

1 freight shipment to Germany 1 to France

And similar for parcels

The individual consignments will then be broken down inside the country and shipped on

Cost becomes £200 a massive reduction

 

If you are simply shipping to end customer then you may want to remind your customers they will be liable for the import duty and vat assuming you export as a GB VAT registered entity

 

Having attended a number of meetings everything is subject to change...we for example were informed y a senior civil servant on the Monday at 1500 of the £65 fee for settled status by the time we got back to Waterloo atb1600 the announcement had been made it was now 0.

 

Colin

 

 

 

 

[Enterprisingwestern]

On 14/02/2019 at 20:57, Enterprisingwestern said:

 

Sorry if this is a slight OT diversion, but how do those of us outwith the UK purchase our "toys" from UK model suppliers in this scenario?

 

Mike.

 

Just to clarify, I will still be in the EU, so will this count as a "foreign country" as with non EU countries?

 

Mike.

[Andy Hayter]

My understanding Mike is that unless there is a trade agreement, we will be in a foreign country - except during any transition period.  Sorry for the ifs and buts there but until there is any clarity of what is going to happen post 29/3, it is difficult to be definitive.

 

So if there is a crash out of the EU, you can still buy from Rails, Hattons or whichever your preferred supplier is.  You may well be able to purchase VAT free at the UK end but you are likely to be charged VAT at arrival into th EU - plus a handling charge.  It will probably work out cheaper to ask your supplier to stockpile your models, fly across and collect them - with an export certificate to reclaim VAT - and essentially smuggle them into the EU.

[Foulounoux]

UK duty rates will be released in the next couple of weeks.  

 

[Joseph_Pestell]

Was just passed this update from HMRC. In itself, not perhaps relevant to the OP as it deals with warehousing of other businesses' goods. But there are also some links in the document to other HMRC advice as well as an opportunity to sign up for further information updates.

https://www.gov.uk/guidance/customs-warehouses-what-to-expect-on-day-one-of-a-no-deal-scenario

 

[Georgeconna]

On 14/02/2019 at 10:59, GeoffAlan said:

I'm not convinced that toys are zero rated. Certainly I've previously paid import duties on Kato model railway rolling stock and locos. The VAT, other duties and fee from the courier add up fast.

 

If you did pay duties then you were charged wrong. Model Trains are indeed duty Free. Vat is levied upon importation.

 

9503 00 30 

-  Electric trains, including tracks, signals and other accessories therefor; reduced-size (scale) model assembly kits 

ERGA OMNES (ERGA OMNES 1011)

Third country duty (01-01-2007 - ) : 0 %

R1549/06

 

see link below.

 

http://ec.europa.eu/taxation_customs/dds2/taric/measures.jsp?Lang=en&SimDate=20190220&Area=&MeasType=&StartPub=&EndPub=&MeasText=&GoodsText=&op=&Taric=9503003000&search_text=goods&textSearch=&LangDescr=en&OrderNum=&Regulation=&measStartDat=&measEndDat=

[Andy Hayter]

The problem is that if the seller uses the wrong UN code on his documentation (9503 00 30 ) then duty may be due.  Some electrical goods do attract duty and for anyone unfamiliar with the coding system - or a freight forwarder who misunderstands the description of the goods - it is relatively easy to make a mistake.

 

It is one of the occasions when getting on your high horse and demanding that these are not toys, but electrically operated scale replicas, could end up costing you money.

[Georgeconna]

36 minutes ago, Andy Hayter said:

The problem is that if the seller uses the wrong UN code on his documentation (9503 00 30 ) then duty may be due.  Some electrical goods do attract duty and for anyone unfamiliar with the coding system - or a freight forwarder who misunderstands the description of the goods - it is relatively easy to make a mistake.

 

It is one of the occasions when getting on your high horse and demanding that these are not toys, but electrically operated scale replicas, could end up costing you money.

 

UN is for Haz Mat.

 

HS, HTS, CN code are the norms for Tariff Designations.a quick google will show up these and any person clearing stuff worth their salt should now where to find this but normally we would ask the consignee to Clarify the Tariff Code but then again I had a Fella bringing in Ski Equipment from overseas only to find these were watches but could be used for Skiiing!! No dice!

 

 

[rockershovel]

From what I can see, “go with the flow”. The situation has for some time, been reaching the situation whereby businesses simply cannot continue with no plans, so are making plans covering a no-deal scenario - on the basis that they can, at least, be defined. I also strongly suspect that a lot of the actual functional details will be quite similar, either way. 

 

I don’t doubt that there will be a vast amount of huff, puff and bluster, especially at first, but “res ipsos facientur” (“things tend to sort themselves out”) will be in full effect, and governments and oppositions alike will be under immense pressure to produce workable outcomes. 

 

Given the number of people who will probably attempt to make all sorts of second-guesses in the next few weeks, anyone who can afford to just defer any action is probably best advised to do just that. 

 

 

Edited February 20, 2019 by rockershovel

[Neil]

Yesterday I found an interesting and pertinent piece on the likely implications of moving goods to and from the UK under Brexit.  Worth listening to as it comes not from a politician or commentator but from one who is involved daily in the practical business of transporting goods across the channel. From the piece it's clear that it's smaller consignment sizes (van loads) .

[Andy Hayter]

I fear large loads will apply too, if only to ensure VAT compliance.

 

Goods purchased in the EU will be VAT free.  The importer will be responsible for declaring the VAT on import that is due.

"Honest gov, it was 4t of sand valued at £40" (VAT = £8) " and not the three Ferraris at a value of £500.000" (VAT =£100.000)

 

I doubt that system will fly for long.

[admiles]

On 20/02/2019 at 14:46, Georgeconna said:

 

UN is for Haz Mat.

 

HS, HTS, CN code are the norms for Tariff Designations.a quick google will show up these and any person clearing stuff worth their salt should now where to find this but normally we would ask the consignee to Clarify the Tariff Code but then again I had a Fella bringing in Ski Equipment from overseas only to find these were watches but could be used for Skiiing!! No dice!

 

 

There speaks the voice of a seasoned forwarding agent me thinks....

(takes one to know one!)

[Junctionmad]

Whatever happens , the Uk outside the EU VAT scheme is a disaster for modelers outside the UK relying on small traders typical of this hobby. 

 

I remember the PITA that existed before the single market . VAT at point of entry is a awful issue. 

 

In in the past parcels arriving in Ireland fron the UK , you would pay the vat customs duty etc to the postman. Now of course that isn’t possible as postmen( women ) arnt allowed to keep cash. So now you have to drive X miles  to the sorting office .  of course customs fees make the transactions on marginal value products ridiculously expensive. 

 

The head of irish revenue services actually said recently that the  changes are so profound that internet based selling as has developed in the last few years will not be possible as the delays and added costs will not be visible to the purchaser at time of purchase and that will cause huge upset 

 

aside from the  fact that many model railway traders are not set up to do the documentation to export anyway and have no desire to implement it. This suggests that continuing to trade with them will be very problematic . I remember well how difficult it was to get traders in the uk, to a fix a small green customs declaration or to refund VAT ( my system doesn’t support that etc ) the net effect will be , I suspect, these traders will not ship outside the UK 

 

A big further issue, is that many here , use mail drop services in Northern Ireland( parcel motel)  , or the UK ( address pal ) to effectively make use of free or low cost UK domestic mail and then pay a small inter shipment fee . Ie a form of groupage for the common man. This means today vat is uk paid , on a no deal , potentially we will pay double vat and customs charges. 

 

If if I bring stuff in from the USA potential I can double the cost due to import freight and vat , sadly this name be the same fron the UK 

 

 

one only has to stand in the truck park in holyhead and see just in time logistics at work to see the massive disruption that will follow 

 

oh well , it MAY make me scratch build more stuff! . 

 

i see amazon.de is setting up an English language version of their site. At least that’s promising 

 

so long and thanks for all the fish 

Edited March 22, 2019 by Junctionmad

[Junctionmad]

On 15/03/2019 at 18:54, Andy Hayter said:

I fear large loads will apply too, if only to ensure VAT compliance.

 

Goods purchased in the EU will be VAT free.  The importer will be responsible for declaring the VAT on import that is due.

"Honest gov, it was 4t of sand valued at £40" (VAT = £8) " and not the three Ferraris at a value of £500.000" (VAT =£100.000)

 

I doubt that system will fly for long.

Err , that’s not how it works , the importer “ declares “ the goods on import by providing evidence of their value , don’t tell me you are naive enough to beleive it’s verbal  

 

note also , an onnus exists on the exporter to ensure that goods are explicitly exported before removing vat. the exporter remains liable for that to be clawbacked in the event of an issue. 

 

customs clearance officials are well versed in the attempts at under declaration. 

 

The issue is all this procedure takes takes time and paperwork and that results in delays and significant extra cost 

Edited March 22, 2019 by Junctionmad

[Junctionmad]

On 16/02/2019 at 09:35, Andy Hayter said:

My understanding Mike is that unless there is a trade agreement, we will be in a foreign country - except during any transition period.  Sorry for the ifs and buts there but until there is any clarity of what is going to happen post 29/3, it is difficult to be definitive.

 

So if there is a crash out of the EU, you can still buy from Rails, Hattons or whichever your preferred supplier is.  You may well be able to purchase VAT free at the UK end but you are likely to be charged VAT at arrival into th EU - plus a handling charge.  It will probably work out cheaper to ask your supplier to stockpile your models, fly across and collect them - with an export certificate to reclaim VAT - and essentially smuggle them into the EU.

(A) you wont get an export cert. 

(B) since you are not a certified registered carrier , the exporter is currently not allowed to remove vat as the transaction is now essentially on domestic soil. 

 

You can potentially post sale recover up vat  from HMRC , you will not be able to do that without evidence of legal importation. ( and it takes about 6 months ! ) 

The net result is you may well smuggle them in . But you will not get the vat back 

Edited March 22, 2019 by Junctionmad