Selling on Amazon and Brexit.
10 Jan 2019
The factual situation as of today, that is 20th January 2019, can be summarised by the words of Marjorie M. Liu -
"Expect the unexpected, for the unexpected will almost certainly expect you"
Brexit
The Government of the United Kingdom has still not voted on the exit agreement from the European Union, which means the conditions of the exit are still unknown in most areas, including cross-border trade, transaction settlements, and the flow of goods, which is obviously closely related to selling on Amazon.
If you are wondering whether to start your business on Amazon from the United Kingdom right now, we advise a moment of patience until the situation becomes clearer. If you are already selling on Amazon.co.uk, you will need to closely monitor the developments in the coming months. We are continuously following this topic and will keep you updated on the progress of this "divorce" regarding its impact on sales on Amazon. The final deadline for the United Kingdom's exit from the European Union is 29th March 2019.
What do we know at this moment?
The British Government advises businesses to prepare for the possibility of the United Kingdom exiting the European Union without signing an agreement, known as "no deal". In this case, one can expect temporary difficulties related to shipping products to the United Kingdom due to the lack of customs procedures or the discretionary interpretation of such, which will fall to member states.
Amazon assures that goods in British FBA warehouses will be delivered as usual to customers in the United Kingdom, but disruptions in inventory shifts within the EFN (European Fulfilment Network) are possible. What does this mean? If your goods are in FBA warehouses on the continent and you participate in PAN FBA, their transfer to warehouses in the Isles may initially be complicated. If you store products solely in the UK, ensure higher stock levels for UK customers before 29.03.2019. Amazon recommends shipping to these centres located in the UK by 17.03.2019.
The Government of the United Kingdom has prepared an information package regarding the changes that will occur in the trade of goods if the United Kingdom exits the EU without signing an agreement, that is "no deal". It is worth familiarising yourself with it, as at this moment this scenario is very likely. Link to the government website https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit
The rules for VAT accounting for goods located in the United Kingdom will not change, as they are internal regulations.
Import duties on goods entering the United Kingdom will be enforced from 29.03.2019 at 23:00.
Of course, the negotiations on the agreement and its ratification by the Government of the United Kingdom are still ongoing, regarding the terms under which the United Kingdom will leave the EU. It is certain that from 29th March 2019, it will no longer be part of the EU, which for every seller will involve additional administration of shipments and accounting.
What’s next?
If you are an active seller in the UK, start production and purchases to secure stock levels in the UK before 29.03.2019.
It is also worth recalling, reading, and relating to the following issues in relation to your business as you prepare for a "no deal" exit, namely: EORI registration, anti-dumping duties, tariffs and customs declarations, customs procedures (CPC), classification of goods by "commodity code", Import Licence (for goods with restrictions), and SAD declarations. Some of these issues will be fairly straightforward, while others will be aided by electronic systems, carriers, and accountants, but selling on amazon.co.uk will never again be as simple as it is now.
If you have any additional information, links, interpretations, or wish to share your questions or comments, please write in the comments below the article.
We attach a short import guide to the UK. What you need to know after 29.03.2019.
UK Import Guide
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Happy UK Selling,
Go2Market Crew