Confused about UK to EU shipping?
Confused about UK to EU Shipping? A helpful guide for small businesses
It’s probably really important to mention straight away that I am not a Royal Mail, Government or any other Trade representative. I created this guide with my own research in hope that it helps other people in the maker community. All of my research is based on sending from England, Scotland and Wales; there might be different information for Northern Ireland.
Hello, I am Beck and I am a designer and maker of my own business Priormade and also the owner of a retail shop called Prior Shop. Priormade, is a modern and eco homewares brand and Prior Shop is a creative hub of 45 other modern eco brands. Both my businesses ethos is to sell beautiful, functional products that are made as responsibly and as sustainably as possible.
I send my products to customers all over the world and was really struggling to find information about post Brexit shipping. I have a Royal Mail and UPS business account and between my account managers, online research and spending hours on the phone I pieced all of the information together myself. I shared the information via an info-graphic on Instagram and it went viral! I couldn’t believe how many people were just as confused as I was….I felt like a celebrity!
Free movement of trade = every parcel is strictly checked.
We have left the EU and we do not have the free movement of goods anymore. This means that every single package that crosses a border will be strictly checked. To continue to ship internationally it is important to have a strong and clear shipping strategy. It is our responsibility to ensure that we have everything in place so our packages go through customs quickly and smoothly. If your parcel hasn’t got the correct documents it can get lost, returned to sender (at a cost) or even destroyed! Having the correct documents means your customer can also challenge the customs charge if they feel it has been incorrectly given. I know it seems really daunting at first but once you have this all set up, it’s actually super easy!
It’s all about the VAT.
As there is no free movement of goods from the UK to the rest of the world, the customer will have to pay Import Tax. This amount varies from country to country. If you are VAT registered, all online sales and exports between the UK and EU/Rest of the world are now Zero VAT. This means that you do not charge the customer VAT at the point of sale, but they pay a Customs Tax of a similar amount on delivery.
So in theory, if a customer is purchasing from a VAT registered businesses the price increase is only small as they've purchased it 20% cheaper but are paying that 20%* on delivery. However, if you are a smaller business that isn’t VAT registered, unfortunately the customer will still pay your full retail price (which is technically Vat free) and the Import tax on top; making your product at least 20% more expensive.
What is DDP and DDU shipping?
Lots of couriers including Royal Mail are working on a service called Delivery Duty Paid (DDP) or Delivery Tax Paid (DTP). This is where you (the seller) is responsible for the Vat and custom charges in advance. The cost of this is a premium and you can choose what to charge the customer at checkout.
I can’t wait for this service to roll out, although ultimately it will be more expensive for the customer (as the courier will add a management and handling fee), but at least the customer will know the cost at checkout. I think the unknown of the customs charge potentially puts customers off purchasing. A number of lead shipping companies like DHL and Royal Mail were advertising this on their websites for an April launch (for businesses spending over £5K on postage per annum) but now this date has been put back. Apparently, until all of the countries in the EU have finalised what their custom charges are and what items are restricted, it’s very hard for courier companies to offer this service. Fingers crossed it will be rolled out soon.
For more information on the Royal Mail website click here
So for now. We are all posting Delivered Duties Unpaid.
Parcels under £270 need a CN22 and over £270 a CN23 form. These can be filled out manually at a post office or automatically via Click & Drop.
It's a legal requirement and essential that you truthfully and accurately declare the items being sent.
Electronic Customs Data : Post Office vs Online Click and Drop.
It’s all very well having the CN22/CN23 but if it isn’t correctly submitted electronically, there will be issues at the boarder. We all want to support our local Post Offices but unfortunately some Post Office staff are not filling out the electronic customs data correctly and parcels are being detained, returned or lost.
I personally recommend using Shopify and sign up to Click & Drop. On Shopify you can save the HS code and Country of Origin within each product. In Click and Drop you can save your business name and address, plus your EORI number. When you integrate both platforms, your CN22 form is created automatically with all the information completed. It is also submitted electronically too. If shipping regularly to the EU, I would recommend using both of these platforms to make your life so much easier!
As with all post there might be delays and things lost. I choose to send orders tracked (including international) to make sure I can find where a missing parcel is in the system. You can also see if it has made it to the destination country and if it’s delayed because the customer hasn’t yet paid the custom charges. Also there are benefits like sending items that are otherwise restricted (see below)
What will the customer pay?
Right now, all items under 22€ are exempt. However this will change on the 1st July 2021 and all items will be subjects to Import Tax.Orders between 22€ – 150€
Orders over 150€
There is the Import Tax 17 – 21% and courier handling fee, plus a Customs Charge. I believe the average customs charge is around 5% but this varies depending on the country and the product.
It’s always a great idea to email your International customer to make sure they have read your shipping policy. Make sure you have a clear shipping policy on your website!
Check the destination country’s restrictions
Each country has their own restrictions and some will only let certain products over the border.
France for example are very strict. You can’t send perfumes, aerosols and liquids over 1L. It also seems there is a limit on jewellery, glass and glassware, and wooden articles too. Yes Sweden has hardly any restrictions at all! If you have a business account and send the parcel ‘International Tracked’ you can bypass some of the restrictions. Germany for example you can send aerosols with a business account.
To check if your goods can enter the destination country, see the Royal Mail guide here .
It's called 'E-commerce' if selling directly to your customer
It's called 'Exporting' if selling your work wholesale.
If you are shipping to a business to resell like a shop or gallery it is called EXPORTING, you must also include in an envelope or clear wallet on the outside of the parcel:
- On headed paper, a letter that declares the Country of Origin:
- " I, Rebecca Prior of Priormade Ltd, exporter [EORI number] declares that, except where otherwise clearly indicated, these products are of United Kingdom (UK) origin. We are exporting to [business name and address] with the EORI of [xxxx].
- Signed and dated
- Invoice showing ZERO VAT has been charged.
- Packing slip of the contents (if different to the invoice).
PREFERENTIAL TREATMENT: Something people are not often aware of is that goods with a UK and EU origin have a zero tariff for customs duty. VAT still applies but clear documentation will mean the importer will not have to pay the extra Customs Duty on orders over 150€
Sending work to an EU Gallery
If work is being used for a temporary event and ALL of the work will be returned, you can fill out a form to declare it as a temporary export. This means you do not have to pay import fees when it is returned back to the UK. You can fill out the form here.
I’m not sure how this works with SoR because if some of the work is sold, parts of the original order will be missing so the temporary export might not be valid. I’ve tried to research this but haven’t been able to find the answer.
As long as goods are in the same condition and not altered in anyway, the customer should clearly write RETURN TO SENDER on the package and pop it back in the post. You can decide whether you send them a prepaid label or if they are liable for the return postage cost. When the parcel is re-imported, the business (you) can apply for Import Duty Relief. You have three years from export to import to apply. Images, proof of postage and proof of sale will be needed.
You can fill out the form here
Government funding and support for EU shipping
There is some government funding to support businesses through this transition. To find out if you are eligible click here
Business west run various courses to help people in more depth. View what they have available here.
I hope this information has been helpful. As I mentioned to start with I am not a Royal Mail representative and I do not have all the answers. All of this information is online in various places but I've just pieced it all together. Everything I've written above might change so please always check with the courier you are using and the gov.uk website to find out more information.
If there are any edits or information that needs changing, please leave a comment below! I appreciate the feedback.
I created this blog in my spare time in hope it helps my fellow small business owners. I would be so grateful if you could head over to Priormade and Prior Shop on Instagram and give them a follow. Perhaps have www.priorshop.uk in mind for your next gift purchase? I would be so chuffed!
- Beck Prior x