10 tips for e-commerce – get ready for Brexit

As the transition period for Brexit ends 31 December 2020, all e-commerce traders will need to consider actions before they move goods. Here some tips for you to take into account:

For companies located in the UK

For companies who use warehouse in the EU, for example, Amazon FBA or another warehouse:

• Get EU EORI number, because your UK EORi will no longer work for EU import.

For UK businesses without warehouses outside the UK:

• If you plan to send orders from your UK warehouse you will need as from 1 of January register as a VAT payer for all your goods which cheaper than 150 EUR. Otherwise, your buyer will need to go through a very complicated Customs clearance procedure. Because from January 2021 low-value goods are VAT taxable when imported by post. The threshold will be zero for imports. That means that if you send an order which is 2 euro you still need to calculate and pay VAT as a supplier.  Lovat platform will help you to fill customs declaration. With this scheme, VAT will be due not at Customs, but at the end of the moth of import.
• If you have EU VAT registration, in some countries you will need to appoint a VAT representative. This is so for Italy for example.

For EU business that want to continue selling in the UK

If you use a warehouse in the UK (for example Amazon FBA warehouse):

• Get GB EORI number. As you cannot use EU EORI for your customs clearance anymore.

If you don’t use warehouse in the UK and send parcels directly from EU:

• GET GB EORI;
• Get UK VAT number to use a simplified scheme. This registration is voluntary, but as the import threshold will be removed- it is going to become too complicated for buyers to order goods from your shop if you don’t use this scheme.
• Apply for a simplified declaration. Submit Monthly Postponed Import VAT Statement (MPIVS). You can use Lovat to do it.
• Find a commodity code to classify your goods. To be able to use reports at the Lovat platform you need to update all commodity codes for your goods by 1 of January 2021.

For those who sell services and was registered for MOSS in the UK

• You need to choose a country to register for MOSS in the EU we can help you to choose a country.

For those who sell goods B2B

• The reverse charge mechanism will be applied (as it is now) if the byer has a UK VAT number.

*In this article GB or Great Britain i.e. the United Kingdom except for Northern Ireland

** This article doesn’t cover Goods with specific Customs Requirements for example excise goods or gifts