Brexit - what does it mean to our EU customers
Hello, my fellow Europeans,
So, it has happened now. The UK is officially out of the EU. I was hoping that through all those years since the referendum the decision will be reverted and it won't ever become a reality, but hey, here we are. There's no point in crying over spilt milk, as it is what it is, even though as an EU citizen myself living in the UK for the past 13 years, I had no voice over this whatsoever.
Since 1st January 2021 I have read, listened and watched all sorts of information about what this 'divorce' will mean for our EU customers.
This statement only addresses the transition period which is between 1st January and 1st July 2021. After 1st July there are going to be different rules and these are not set in stone yet.
So, as trading between the UK and the EU has become "export/import" now, rather than "dispatches" (EU state to-EU state move of goods), there are two main charges which may apply to our EU customers upon receiving their parcels. These are dependent on the value of your order, and the type of goods.
For our yarn, the terms below are applicable. Remember, this is only up to 1st July. After this there will be a single VAT value for the whole EU, rather than different charges for each state individually.
|Order Value||VAT||Import Duty|
|up to €22||
No VAT - for countries: Austria, Belgium, Czech Republic, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia)
Countries with different threshold for no VAT: Bulgaria 30 BGLV, Croatia - 160 Kuna, Cyprus - €17, Denmark - 300 SEK, Greece - €15, Sweden - 300 SEK)
|No Import Duty|
|€22 - €150||Import VAT will be applied at the domestic rate of the country where the parcel crosses the border (its' usually between 17 -21%, depending on the country) France is 21%, while Luxembourg is 17% etc||No Import Duty|
|over €150||Import VAT will be applied at the domestic rate of the country where the parcel crosses the border.||No Import Duty|
The most important thing which I have not mentioned before is, that when we started being responsible for paying VAT a year ago, I did not increase our prices by 20% on the website as I thought it was unfair to our customers to all of sudden jump prices by 20%.
So, even though on the orders over €22 (orders of more than 1 skein, to put it into context) you now might be charged 20% on the delivery. Remember, that we could have charged this for a year already - while the UK was still a part of EU. If we had increased prices by 20% for VAT, the cheapest skein would cost £22.80 instead of £19.00. It might surprise you that the delivery company is now asking a fee (VAT) for goods, however, think about all the money you saved with us over the last year. :)
At the time of purchase you may see 'tax included' message but this does not mean anything as every single order gets this message, regardless of where are you purchasing from. This is only because I have decided to not increase my prices for VAT purposes and this keeps the price the same for everybody and where VAT is applicable it actually reduces my profits.
Now when ordering from some other companies, their prices may now "be cheaper" because they dropped prices as they don't charge VAT to EU customers any more. The difference now is that it's been handed over to your country's 'tax man' is all, rather than the tax man of the company/seller.
The only downside is that you have to pay for your purchase in two parts. Hopefully, by 1st July all will become much clearer and we can avoid this altogether.
To clarify, if you only purchase a single skein, there should be no additional charges (VAT) as it stays under the threshold for VAT. Above €22 VAT charges apply as per the table above.
This is my understanding of the situation. However, if you are charged any fees on your order in your local currency, please do understand that this is a complex situation I am trying to get my head around as everyone else. I would also love to hear about EU customers' experience who have placed an order since 1st January. E.g. Did you pay any extra fees? Did delivery take longer than you may have expected? Please contact me via our Contact Form.
I hope all of this makes sense.