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 influential 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, 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 sell 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 are 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, shipments may 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 make the Phone Number field required by heading to Appearance > Customise > Woocommerce > Checkout > Phone field = required.

Inkthreadable does 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 in shipping costs?

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

Royal Mail has 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 has not yet released updated pricing for 2021.

Will there be increases in 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 for resources 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 trades on a DAP (Delivered At Place) basis with our customers; this is how most goods will be exported to the EU.

Alternatively, you can use IOSS by following the guidelines in our help centre


How will your orders be affected?

We've provided information in this blog for the five 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 Rest of World United Kingdom EU
5 EU United Kingdom Rest of World

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 in the EU, you will 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 (with a UK-based billing address).

Starting July 1, 2021, every online order going to a different country in the EU will need to pay extra taxes and fees. We cannot estimate this per order. However, you can look up that particular country's rules on import fees and VAT if your customers ask.

When someone buys something from you, the value of the order will decide the extra fees in the country where it is being shipped.

Tell your customers during the checkout process that they might have to pay money for Import VAT and Duties when sending to the EU. Most European consumers know this when buying from the UK, but it is important to remind them to prevent any queries down the line. 

The amount of money they need to pay will be different depending on what country they are in and what products are being imported. We will give the courier all the information needed to ensure it is quick and easy to deliver.


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, full guidance can be found on the HMRC website.

When you order from Inkthreadable, your order will always be 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 (your billing address is not in the UK).

Starting July 1, 2021, every online order going to a different country in the EU will need to pay extra taxes and fees. We cannot estimate this per order. However, you can look up that particular country's rules on import fees and VAT if your customers ask.

When someone buys something from you, the value of the order will decide the extra fees in the country where it is being shipped.

Tell your customers during the checkout process that they might have to pay money for Import VAT and Duties when sending to the EU. Most European consumers know this when buying from the UK, but it is important to remind them to prevent any queries down the line. 

The amount of money they need to pay will be different depending on what country they are in and what products are being imported. We will give the courier all the information needed to ensure it is quick and easy to deliver.


Scenario 5

I'm a Merchant from within the 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 and previously were charged VAT by Inkthreadable. 
If you're an EU merchant with a VAT number, there is no change to this scenario regarding 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 depend on the consignment value. As each country has its 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 discuss 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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