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How European companies adapt to Brexit

Victoria Bisset (Victoria Bisset)
BBC News

Image copyrightGetty Images

Nearly two months have passed since the free trade agreement between the United Kingdom and the United Kingdom after Brexit came into effect.

Under the new regulations, European companies must directly pay UK business tax or value-added tax on sales of less than £135 (€155; US$190), so they must now register and report quarterly with the UK authorities.

Other changes include customs declarations and other paperwork. So how have they adapted so far? What impact did these changes have?

Laurent Caplat, founder of BienManger.com, a French online food store

BienManger accepted the final order from the UK on December 18 and will ship it before the new regulations take effect on January 1. It is not clear if and when services to the UK will be resumed.

Image copyrightBienmanger.com
illustrateLaurent Caplat said that he will need to spend time evaluating costs and changes before deciding on the next step

We operate an e-commerce delicatessen that sells selected fine foods from France, Europe and all over the world. About 20% of our orders come from outside France.

The UK market is not the center of our business, but UK customers have been looking for these products and are happy to find them on our website.

Even in November and December, what will happen to Brexit and what the rules will be is still a bit vague. We have now heard of the new procedure for shipping packages to the UK, but it is not yet clear.

We still keep in touch with some British manufacturers and sell British and British products on our website. We have customers in the UK calling and saying: “I used to order this product on your website, where can I find it?”

It’s great to start reselling to the UK, but we need to spend more time to better understand the changes and costs involved. Our question is, is it worth implementing all these solutions for the small number of businesses we do in the UK?

From my perspective, it is difficult to have any opinion on Brexit: everyone will adapt and adapt. I just regret that we used to have this free market and it was so easy to do business throughout Europe, but now it has become more difficult.

Thomas Leppa, co-founder of the online wall sticker design company Made Of Sundays in Finland

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

Image copyrightMade on sunday
illustrate“Made of Sundays” stated that many of its sales are made through online marketplaces, which increases the price of VAT

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

The biggest practical problem is the confusion between customers. Many people don’t understand how the system works: people think that if the order price exceeds £135, they don’t have to pay taxes at all, so we must state that the more you buy, the more you have to do.

When the purchase amount exceeds £135, the customer is responsible for paying VAT after the product arrives in the UK.

Nowadays, people want to get free delivery service through online shopping, but through Brexit, this is quite expensive, and these fees must be paid. When you use the courier service, they must make a customs declaration, and each package will have to pay an extra 5 euros (£4.30).

I still don’t know how complicated it is to declare taxes to the UK and how much work is needed. Fortunately, a large part of our sales in the UK is through the Etsy market, where they add UK value-added tax on top of the price.

But the biggest problem for us is our accounting treatment: this is another country and we must check all taxes and calculate the correct amount for the Finnish tax authorities. In this sense, it has more work to do, but otherwise it is progressing pretty well, so we really have not considered not selling it to the UK-at least for now.

Dorte Randrup, export manager of clothing brand NÜ Denmark

The company faces a one-month interruption, but deliveries from its UK supplier have now returned to normal.

Image copyrightNot Denmark

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

Before Brexit, we managed to send some of our inventory to our distributors in the UK and Ireland, and then it took about a month or so to be unable to send delivery.

We have to wait for the VAT number to ensure that all new customs regulations in our system are correct, but we have a company to help us handle it correctly.

Our distributor in the UK managed to keep in touch with customers, but the impact was not too serious because it was in the middle of the peak sales season and due to the British blockade.

We are now able to deliver to the entire UK.

Harald Mücke, owner of the German online store Spielmaterial.de, sells board game components

Due to VAT regulations, the company has stopped selling directly to hundreds of individual customers in the UK.

Image copyrightSpielmaterial.de

We considered obtaining a VAT code to be able to send smaller items to the UK, but it was too much work. Therefore, if the order price is less than £135, we will not be able to send it to private customers in the UK.

I have some business-to-business customers, they are not affected, but all small customers have disappeared. There are about 400-500 British customers, and we can no longer provide services, so we have caused losses here.

For orders over £135, this is much more expensive for all UK customers because they have to pay customs fees and some fees: for example, DHL charges a fixed fee of 12 euros per package.

I can sell goods to private customers in the UK through platforms such as Etsy and eBay, and then the platform must collect UK taxes. But you must pay the initial fee, which costs money. We have about 10,000 projects, so we have to pay 10,000 times, which is something we don’t want to do. Therefore, customers cannot purchase all products.

We must also update our online store system to adopt a value-added tax system and UK shipping costs, which cost several thousand Euros. This is the only country in the world that handles taxes in this way, and this is the main problem. This is a personal thing done in the UK, not anywhere else in the world.

Bal Loyla, owner of Europa Fresh, a British Eastern European grocery store

The company launched shortly before the first UK lock in 2020, but has now suspended deliveries to Northern Ireland and Europe.

Our business is still growing, but it has now been killed.

The idea is to start more exports: we know there are a lot of customers there, and we get a lot of inquiries. But this is something we must slow down until things become easier or clearer.

The courier has notified us that they will no longer deliver food to Northern Ireland.

Media titleWhat is the agreement between Northern Ireland and Brexit?

Then in Europe, the order involves a lot of problems because it involves a lot of paperwork. You must specify each product in the order-sometimes our order contains as many as 50 to 100 items, which takes too much time.

We are just a small business, so it is not worth the headache.

We used to import products from European wholesalers, but now we have to use products in UK companies. A supplier we have in Germany is now using customs brokers, and each delivery adds to the cost, so our import from them is no longer worth it-I think they add another 200 euros to the delivery fee and service cost, Product Cost.

Our profits were almost cut in half because we had to pay the middleman before we could import and save. Unfortunately, we have to pass on the extra cost to the customer.

We are only seven weeks away from Brexit and prices have risen, but it is difficult to say exactly how much this will affect us in the long term. I think for small businesses like ours, more guidance is needed.

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