The United Kingdom officially left European Union in early 2020, but a transition agreement has only recently expired, leading to the implementation of new rules that went into effect on Jan. 1, 2021. These post-Brexit rules have implications for UK-based ecommerce merchants selling to countries still in the EU — and vice versa.
The ShipEngine team has created a helpful guide to the Brexit deal and what it means for ecommerce merchants in our documentation. Here’s a look at 3 ways Brexit and its new rules will affect online sellers.
Customs borders are changing with the implementation of Brexit, which means changes to tax and duty rates, required export/import documentation and more.
First and foremost, all sellers in the UK must now have an Economic Operators Registration and Identification number — better known as an EORI. The type of EORI you need will depend on where you are shipping to. In some cases, you may even need multiple EORI numbers. Visit our documentation to see a reference table that breaks down EORI numbers needed when shipping to or from Great Britain, Northern Ireland, the European Union, or a third country.
Keep in mind that new customs borders mean that Harmonised System (HS) Codes will now be required on shipments where they were previously unneeded. HS codes are standard around the world, but many of the categories included can differ by country. Make sure that you’re using UK-specific HS codes and categories when shipping to the UK.
Learn more about how Brexit will affect customs in our documentation.
Brexit’s January 2021 implementation also means changes to Value-Added Taxes (VAT) on shipments to and from the UK. Depending on the value of the goods you sell, you may need to register for a VAT number in certain EU countries.
There’s also a question of when duties are paid and by whom. There are 2 ways to ship a package that requires duties:
- Delivered Duty Paid (DDP): The shipper pays for both the shipping cost and all taxes associated with it.
- Delivered Duty Unpaid (DDU): The shipper pays for the shipping cost, but the recipient owes the taxes associated with it. Typically, customs agents will use shipment contact information to get in touch with the recipient and collect any taxes due.
Various ecommerce marketplaces are taking different approaches to duties and taxes. For example, Amazon and eBay are now requiring DDP for goods shipped from the UK to EU member nations. These taxes and duties are collected upfront before shipping. Again, visit our Brexit guide for the latest on these changes and what they mean for VAT.
3. Shipping and Fulfillment
The more information you have on file with each of your carriers, the easier it will be to continue shipping without interruption to and from the United Kingdom. Make sure that you have on file both VAT and EORI numbers with each of your carriers. This information helps in situations where your tax identification number is not included on a shipment, and it also eases your shipment’s path to clearing customs without delay.
We have detailed carrier-by-carrier information on how to best manage Brexit for your business. Learn more when you visit the complete Brexit guide included in our documentation.
Need Support While Selling in the UK?
The United Kingdom’s official departure from the European Union brings to an end a tumultuous period. But there remains uncertainty on how Brexit will impact trade between the UK and EU member nations.
At ShipEngine, we help our users solve shipping by providing APIs that help them shop rates across 40-plus carriers, validate addresses around the world, print discounted labels, track packages and more. As part of our commitment to supporting users, we stay on top of changes to shipping rules, regulations and requirements — Brexit included.
Bookmark the Brexit guide in our documentation, which will be updated regularly, to get the latest on how this transition may affect your ecommerce business.
And, if you need a shipping API that can help you navigate Brexit without interruption, get a free ShipEngine API key and start building today.