While it hasn’t occupied the headlines nearly as much this year, for obvious reasons, the subject of Brexit is attracting attention again this month. Not least for the shipment changes and supply chain headaches that a December 31st, 2020 deadline is posing for brands.
With backlogs forming at British ports and administrative burdens threatening to increase costs in the near-term, shipping to customers in the United Kingdom is already more complicated. Uncertainty over the details of a potential trade deal, or indeed whether a deal can be reached at all this late in the process, continues to make things worse. However, there are some important steps that brands can take to somewhat smooth the road ahead.
Brexit Shipment Changes
As 2020 draws to a close, brands with customers in England, Wales, Scotland, and Northern Ireland need to make arrangements to comply with new regulatory requirements. With escalating penalties for non-compliance, it pays to be aware of these updates and adjust your shipment processes accordingly.
These are some of the key changes for any business shipping to UK consumers:
1. All brands shipping to UK consumers have to register for a UK VAT number by January 1, 2021.
2. The UK Gov is removing the current de minimis of £15 and will require VAT on everything.
3. For orders under £135, the brand is responsible for collecting and remitting the VAT to the UK government, and they must include their UK VAT number in the shipment to the UK customer and collect VAT in cart.
4. For orders over £135, it is business as usual and the shipping company is responsible for paying VAT as part of the import, customs clearance process.
If you have not already taken steps to address these important Brexit shipment changes, you can register here through the UK government. You can also work with companies like Passport, Zonos, and Shopify to address any gaps in your system.
Beyond the current confusion and uncertainty, there are hopes that the UK can take the broken eggs of Brexit and turn them into a palatable omelet for trade partners beyond Europe’s borders. A trade deal with the US has long been on the agenda, which would be of keen interest to those of us across the pond, while the British government is also working on plans to develop the country as a shipping registry hub, in the vein of Singapore.
Only time will tell how realistic these initiatives are, with the world focused on handling the global pandemic and the economic recovery every country hopes will follow.
In the meantime, Brexit shipment changes continue to challenge companies shipping to the region. All that brands interested in the UK can do is take the steps detailed above, identify supply chain partners who can help them as needed, and hope that holiday cheer prevails in last-minute negotiations between British Prime Minister, Boris Johnson, and Ursula von der Leyen, President of the European Commission.
If nothing else, at least they’ve chosen the right time of year for a miracle.