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Brexit and EU VAT Regulations

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Brexit and EU VAT Regulations

Posted by -Mertaal ,25th Oct 2021
Brexit and EU VAT Regulations

DON'T WORRY- NOT GETTING POLITICAL!!!

Our website: EU customer? Confused? Understandable.
For those of you who want facts, not commentary, here is the TLDR:

*From now on we will not charge EU customers VAT on our website. BUT the VAT will not be deducted from the price until you have entered your shipping details in the checkout process.

So the prices you see are WITH UK VAT, but you will actually be charged 20% less.*

Commentary:

This is really bloody irritating, but there is no way to show some customers pre- and some customers post-VAT prices based on location, until that location has been determined at checkout. Technically it should be possible to just read your IP address location, but the e-commerce platform we use can't do that apparently.

I can't justify creating two websites, one for EU sales and one for RoW sales, and in any case, without incorporating an EU business, I'm not allowed to buy a .EU URL any more.

This year has been pretty taxing on my time and unfortunately it's taken me the longest time to get properly organised for post-Brexit trade rules. Aannnndddd... in short, i'm still not properly organised.
The rules changed in January (because of Brexit), but then also again in July (new EU regulations that apply to all imports from outside the EU- nothing to do with Brexit).

I won't go into it, but there are basically two systems to choose from, depending on whether your average sale is over or under 150 euros. Our average sale is pretty much exactly 150 euros, meaning we'd have to do double the paperwork for, frankly, very few sales to the EU.

They used to be 1/3 of our website sales and this year have dropped to almost nothing. Now, I suspect that's partly because I've failed to address the situation properly but we do most of our business at distribution and so while I'd love to make the EU customer experience as smooth as possible the new VAT regulations the EU introduced in July make this very labour and cost intensive.

I also think that the main reason for a massive drop in sales to the EU is bad publicity surrounding Brexit and e-commerce from outside the EU, and even if I had organised a smoother system I would still have seen the drop.

Ultimately the solution is to register for EU VAT, probably in Germany, and keep stock in the EU and fulfil from there directly. However, this is quite an endeavour and a big financial and time-gamble at a time when I'm trying to create some personal work-life balance and prepare the next two kickstarters we will be running.
The current solution is not ideal- you'll have to pay local VAT on entry, and I know there are handling charges involved in some countries/with some local couriers, but for the moment it'll have to do.
We are still shipping to the EU for free on any order over £100, which is higher value than the 10 or 16 euro handling fee the courier will charge. I totally accept that it's not worth buying one or two models, but hopefully bigger orders are still worth it for those of you who are finding dificulty in getting the range locally.
And finally, on that note: Tell your store to get in touch with me directly if they're struggling to get things at distribution. I've heard various stories of problems, but we can supply direct if neccessary.