The Ultimate Guide to UK Cross-Border Trade: Everything You Need to Know

Ecommerce has revolutionized the way we do business, allowing companies to reach customers across borders and launch new products overseas. Within this, the EU remains the UK’s key trading partner. However, with the UK’s exit from the European Union, ecommerce exports between the EU and the UK have faced several changes, particularly in terms of tariffs, VAT and customs clearance.

Key changes that impact cross-border trade

Tariff changes under UKGT

The UKGT (UK Global Tariff) replaced the EU’s Common External Tariff (CET) and has brought changes in the tariff rates for various products, impacting the costs of importing and exporting goods.

What does this mean exactly? The tariffs will be set in pounds, not in euros. This change affects Ad Valorem tariffs, the percentage on the final price, and Specific Rate tariffs, the amount of money charged per unit. Companies need to understand these new tariff rates and ensure that they comply with them to avoid additional charges and delays in customs clearance.

Revisioning the VAT

The levied VAT (Value Added Tax) on goods sold into the EU has also changed. Businesses exporting goods from the UK now must pay VAT on goods valued under 19 pounds (22 euros). Additionally, the EU is scrapping its low value import threshold and replaces it with a new import one-stop-shop (IOSS) to facilitate the reporting and payment of import VAT on low value goods.

The IOSS only applies to goods valued under 150 euros. Similarly, e-tailers selling goods worth 135 pounds or less from the EU to the UK must charge and account for VAT at the point of sale. If sales exceed 135 pounds, they will also be subject to customs duty, import and local VAT.

You can imagine these new rules caused compliance issues for business operating across EU and the UK.

Continuing trade without friction

Since Brexit, customs clearance procedures are one of the biggest procedural changes that impact UK export operations. As a result, retailers are required to submit customs declarations. But that’s no different from doing business with other international markets like the US or Canada.

That said, there are two conditions retailers should focus on when working internationally. It is crucial to get the data right. Making sure all data are correct and complete will enable a smooth clearance process. The other key thing is to partner with e-logistics providers who possess in-house customs knowledge and systems to simplify the process. By doing so, retailers can leverage their expertise to navigate the regulations.

As several players have temporarily left the market due to the new regulations,

retailers with the right logistics partner, may even find new growth opportunities in the UK market.

How Landmark Global’s customs expertise and technology helps retailers:

  • Ensure that the correct data is provided, compliant with customs regulations. This means goods won’t be held up and the risk of delay is reduced to a minimum.
  • Avoid shipment problems, costly duties and taxes by taking advantage of the UK-EU trade agreement.
  • Stimulate customer satisfaction by calculating the final cost of transaction, inclusive of all duties, taxes and shipping costs at checkout and all in the customers’ preferred currency.
  • Staying ahead of the curve by remaining compliant with the latest legislations in target markets.

Do you want to know more about the challenges of cross-border trade and how we can support you mastering export growth post-Brexit?

Time to read 3 minutes
Published 20 March 2023

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