This blog posting will be constantly updated to reflect the current situation.
TL:DR
- Minimum order amount of 135GBP because of HMRC, not Brexit
- You have to pay 20% UK VAT
- For goods not produced in the EU, you also have to pay customs (wasn’t part of the trade deal)
The following manufacturers are in the EU and thus free from customs (but not VAT):
Bad Wolf
FlurbMe
FurryStyle
GLC
Lizard Lars
Sidewinder Creations
Current status
- Amazon
- Amazon.de shipping to the UK disabled (does not affect Yiffy.Toys store)
- Amazon.co.uk disabled
- VAT
- For Northern Ireland, the movement of goods doesn’t change. We split up the UK based on post code in our shop system to accomodate that. However DHL requires us to include customs paperwork because everything for N.Ireland is shipped through GB. There should be no paperwork or payment required by the customer. This is just for DHL temporarily storing parcels in GB.
- Inquiry at HMRC about specifics for UK VAT invoices to implement them late in 2021
- we are no longer required to charge 16% German VAT
- UK requires customer to pay 20% UK VAT for imports
- Minimum order size equivalent to 135 GBP to comply with UK VAT regulations (Not Brexit but HMRC)
- Customs and imports
- we are adding a CN23 customs export declaration to all UK orders
- we also added our EU EORI number and activated electronic transmission of customs export data
- DHL has informed us that they will try to do the customs import paperwork in coordination with Royal Mail. Of cause customer are still required to do the payment part.
- UK requires customer to pay customs fees for imports of goos not originally produced in the EU (not part of the UK-EU trade deal)
Next Steps
- early 2021 Automatically enforce that minimum order size (Not Brexit but HMRC)
- late 2021 Evaluate possibility of automatic invoice printing UK VAT complient dual-currency invoices with a tax point (date of supply) for orders below 135 GBP
- late 2021 Waiting for a solution to have UK VAT on orders <135GBP but no UK VAT for orders >135GBP.
Background: HMRC VAT regulations
According to a policy document of HMRC, above 135 GBP the customer pays the 20% UK VAT along with the customs fees. Either to the customs office or to the postal service (if the postal services did the paperwork in your name). This is not part of Brexit but a change in the VAT rules made by HMRC.
TL:DR: This requires heavy modifications to our software and processes. Mostly because of the currencies. It is likely that we will just require a minimum order to be 135 GBP.
Doing that will require a modiciation to the shop software to allow for a minimum order quantity to be country-specific.
Below 135 GBP, we would be required to pay the VAT. However doing that is not exactly easy.
- We would have to register for a UK VAT ID in addition to our existing EU VAT ID.
- For that we would need an very expensive british business bank account first or an explanation why we pay by debit card or (with unknown fees) credit card with no way to receive refunds that way.
- Our invoices would have to state the UK VAT and the total sums also in british pound using the official exchange rate of the european central bank at that time (even if the invoice is printed ahead of time or a copy is printed at a later time).
- Our invoices would also suddenly need to contain the date of shipping (that happens after the invoice is printed). Something our shop software is in no way prepared to do.
- Obviously we would have to declare our UK taxes and pay then and keep separate records. Luckily the later can be done on paper, so we don’t need to bend a German accounting software using Euro into somehow handling this.
- Also we would need a way for our shop software to determine that UK VAT applies only to orders <135GBP but not to orders above this threshold. Something it just can not do yet.
