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How Brexit will affect your Print on Demand store with a UK Supplier

The information in the article below is not professional tax advice and is curated from Inkthre­adable's under­standing of HMRC guidance along with advice provided by our tax advisors for our company.
If you're uncertain about changes required of you and your business following Brexit from 1st January 2021, we recommend seeking professional advice.

Following the end of the UK's transition period to leave the EU, which happened on 1st January 2021, there may be changes that your business will face well selling to customers in the EU if you're from the UK, or selling to customers in the UK if you're from the EU. 
These changes are proving challenging to even some of the UK's most infulential high street and e-commerce retailers, with many having suspended exports to the EU.
Courier networks are facing immediate challenges with new export processes that they must follow too, resulting in DPD suspending their services to Europe for the second time in a month in early January. 

For small businesses and sole traders, the advice can be difficult to understand and cumbersome to implement changes. 
We've prepared the following article to condense the main points we think will affect our print-on-demand customers the most, to help you continue to selling into the markets that you know. 

The ways in which you and your customers will be affected by Brexit when using Inkthre­adable as a supplier will vary depending on where your business and your customer is based.

General Questions

Will Inkthre­adable need to collect more data to fulfil my orders to the EU?

Inkthre­adable will soon begin to require accurate contact information for your customers based in the EU, which will be passed on to our couriers in case they need to make contact about import fees that are owed by the customer before delivery can be made.

If this information is not provided, it's possible that shipments will incur delays.

If you're using Shopify, you can set the Phone Number field at the checkout to be Required.

If you're using WooCommerce, you can can make the Phone Number field required by heading to Appearance > Customise > Woocommerce > Checkout > Phone field = required.

Inkthre­adable do not currently require you to provide an EORI number since we are acting as the exporter. However, they're free and fast to acquire for your business from HMRC and worth applying for here in case it's needed in the future.

Will there be increases to shipping costs?

Inkthre­adable mainly use two couriers when dispatching orders to the EU; Royal Mail and DPD.

Royal Mail have increased their prices for January 2021 for Inter­national services, including Europe, which in turn have been reflected in Inkthre­adable's shipping rates which were updated on 11/01/2021.

DPD have not yet released updated pricing for 2021.

Will there be increases to shipping times to the EU?

With the changes in export requirements to the EU from the UK, many couriers are reporting challenges with the increased demand of resource required to process parcels at their usual speed and are advising possible delays in the short term.

Who is the Exporter of the order?

Inkthre­adable is operating as the Exporter of orders that we send to your customers.

Who is the Importer of the order?

Your customer is the Importer.

What Incoterms will Inkthre­adable use to ship to the EU?

Inkthre­adable are trading on a DAP (Delivered At Place) basis with our customers and this is how goods will be exported to the EU.


How your orders will be affected

We've provided information in this blog for the 5 possible scenarios demonstrated below.

Scenario Merchant Inkthre­adable End User
1 United Kingdom United Kingdom EU
2 EU United Kingdom United Kingdom
3 EU United Kingdom EU
4 EU United Kingdom Rest of World
5 Rest of World United Kingdom EU

Scenario 1

I'm a Merchant based in the UK and selling to customers in the EU

If you're a merchant that's established in the UK and selling goods into the EU, you may now need to zero-rate the transaction with your customer.

Inkthre­adable will charge you UK VAT on orders being exported to the EU if you are a UK based merchant.

Whether your customer will receive an uninter­rupted experience and incur import VAT and duties will be dependant on the consignment value. (The consignment value is the amount your customer paid for their order including shipping costs.)

If the consignment value of their order is €22 or below, the order can be imported by your customer free of Import VAT and duties.
If the consignment value is above €22 but below €150, your customer will be liable to pay only Import VAT which will typically be collected by the courier, who will also generally hold the parcel until payment is made.
If the consignment is above €150, your customer will be liable to pay Import VAT and Duties, which will again be collected by the courier.

We recommend ensuring it's clear to your customers during the checkout process if they're likely to incur Import VAT and Duties so that it does not come as a surprise.
The amount of Import VAT and Duties that will be charged will vary based on the Country the customer is based and the product types being imported.


Scenario 2

I'm a Merchant based in the EU and selling to customers in the UK

If you're a merchant that's established in the EU and selling to customers in the UK, you will now need to charge UK VAT to your customers at the point of sale.
This means that you will have to be registered for VAT in the UK. You should register for VAT as soon as the first taxable sale is made, or if you expect to make taxable sales in the UK within the next 30 days and full guidance can be found on the HMRC website.

When you order from Inkthre­adable, your order will always shipped from our facility in the UK.
Since the product is being shipped from and delivered to the UK, Inkthre­adable will charge you UK VAT.


Scenario 3 & Scenario 4

I'm a Merchant from outside of the UK and selling to customers in the EU

Inkthre­adable will Zero-Rate VAT on orders being exported to the EU, as long as you (as Inkthre­adable's customer) are not based in the UK.

Whether your customer will receive an uninter­rupted experience and incur import VAT and duties will be dependant on the consignment value.

If the consignment value of their order is €22 or below, the order can be imported by your customer free of Import VAT and duties.
If the consignment value is above €22 but below €150, your customer will be liable to pay only Import VAT which will typically be collected by the courier, who will also generally hold the parcel until payment is made.
If the consignment is above €150, your customer will be liable to pay Import VAT and Duties, which will again be collected by the courier.

We recommend ensuring it's clear to your customers during the checkout process if they're likely to incur Import VAT and Duties so that it does not come as a surprise.

The amount of Import VAT and Duties that will be charged will vary based on the Country the customer is based and the product types being imported.
 


Scenario 5

I'm a Merchant from within EU and selling to customers outside the UK and EU.

The only change within this scenario after Brexit is to Merchants based in the EU who do not have a VAT number, who previously were charged VAT by Inkthre­adable.­ 
If your an EU merchant with a VAT number, there is no change to this scenario in regards to your trading with Inkthre­adable.

Inkthre­adable will Zero-Rate VAT on orders being exported from the UK, as long as you (as Inkthre­adable's customer) are not based in the UK.

You should continue to Zero-Rate VAT on sales to your customers outside of the UK and EU.

Whether your customer will receive an uninter­rupted experience and incur import VAT and duties will be dependant on the consignment value. As each country has their own tax and duty tariff rates, the fees your customer may incur will vary based on the destination country and the order's value and contents.

In this scenario, your customers will receive an uninter­rupted delivery experience and will not have to pay duties.


If you want to join the discussion of how Brexit has influenced changes in your business, head over to the Inkthre­adable Hub to speak with a community of over 2,000 active print-on-demand stores.­ 

 

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