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How European businesses are adapting to Brexit

By Victoria Bisset
BBC News

image copyrightGetty Images

It’s been almost two months since the UK’s post-Brexit free trade deal with the EU came into effect.

Under the new rules, European companies must directly pay UK sales tax, or VAT, on sales under £135 (€155; $190), so they now have to register and file quarterly declarations with the UK authorities.

Other changes include customs declarations and additional paperwork. So how have they adapted so far and what impact have the changes had?

Laurent Caplat, founder of French online food shop

BienManger took its final orders from the UK on 18 December and shipped them before the new rules came into effect on 1 January. It is unclear if and when it will resume service to the UK.

image captionLaurent Caplat says he will need to spend time assessing the costs and changes before deciding his next step

We run an e-commerce deli, selling a selection of fine foods from France, Europe and worldwide. Around 20% of our orders come from outside France.

The UK market is not central to our business, but UK customers were looking for these products and happy to find them on our website.

Even in November and December it was kind of blurred in terms of what would happen with Brexit and what the rules would be. Now we’ve heard about the new procedures to send parcels to the UK but it’s still not very clear.

We still have a relationship with some English producers and sell products from England and the UK on our website. And we have customers in England calling to say: “I used to order this product on your website, where can I find it?”

It would be a pleasure to start reselling to the UK but we need to spend more time to better understand the changes and cost involved. The question we have is, is it worth implementing all of these solutions for the small amount of business we were doing with the UK?

From my perspective it’s hard to have an opinion on Brexit: everyone will adjust and adapt. I just regret that we used to have this free market and it was so easy to do business all across Europe, and now it’s more difficult.

Thomas Leppa, co-founder of Finnish online wall sticker design company Made of Sundays

The company was established around three years ago and has continued to sell to the UK since Brexit.

image copyrightMade of Sundays
image captionMade of Sundays says many of its sales go through an online marketplace that adds the VAT to the price

We are a very small business but around 20% of our exports go to the UK.

The biggest practical thing has been the confusion among customers. Many do not understand how the system works: people think if they order above £135 they do not have to pay tax at all, so then we have to explain that the more you buy, the more you have to do yourself.

With purchases over £135, the customer is responsible for paying VAT once the product arrives in the UK.

With online shopping nowadays people expect free shipping, but with Brexit it’s fairly expensive and those costs have to be paid for. When you use a courier service, they have to do customs declarations and that’s around €5 (£4.30) added cost for each package.

What I don’t know yet is how complicated the tax declaration to the UK is, and how much work that is. Luckily a big part of our UK sales go through Etsy, the marketplace, and there they add the UK VAT on top of the price.

But the biggest issue for us is our accounting: it’s one more country where we have to check all the taxes and get the sums correct for the Finnish tax authorities. It’s a bit more work in that sense but otherwise it’s been going fairly well, so we haven’t really thought about not selling to the UK – at least for the moment.

Dorte Randrup, export manager for clothing brand NÜ Denmark

The company faced…

Read More:How European businesses are adapting to Brexit

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