Please note that this article is intended for educational purposes only and should not be deemed to be or used as legal, employment, or health & safety advice. For guidance or advice specific to your business, consult with a qualified professional.
Shipping goods to the EU can help your company expand by tapping into exciting new markets. But Britain’s departure from the European Union has caused uncertainty for many small businesses when it comes to cross-border trade.
Read on to discover how shipping to Europe may have changed for your small business since the Brexit deal of December 2020. Our helpful guide covers the key areas to focus on.
How shipping to the EU has changed since Brexit
From import and export rules to the VAT system, Brexit has shaken up how shipping to the EU works.
Import and export rules
Changes to the import and export system include:
EORI numbers. Your company may now require an Economic Operators Registration and Identification code to send and receive goods between Britain and Europe. These numbers help to track shipments across borders.
New customs declarations. Britain’s departure from the EU single market and customs union means you now need to declare imported and exported goods to the border authorities. You can handle this process yourself, although many companies hire a customs agent instead.
Rules for classifying goods. The latest rules on shipping to Europe for a small business also require the right commodity codes to be attached to goods.
You’ll encounter different rules and prices depending on the country you’re shipping products to. As a result, it’s worth researching different methods of transport and customs agents to find the most reliable and cost-effective options.
Any goods you ship to the EU can now be zero-rated for British VAT, following the end of the Brexit transition period.
In a nutshell, this means no British VAT needs to be paid on the items you ship. But you’ll still need to include the information in your accounts.
Restrictions on goods
You may find certain goods require a special licence or certificate when shipping to the EU and beyond. Sensitive imports and exports can include:
- Animals and plants
- Medicines and chemicals
- Military goods and technology
- Antiques and works of art
- Items that may be culturally important
It’s important to bear all these changes in mind if you’re shipping to the EU from England, Scotland or Wales. Different rules apply in Northern Ireland under the terms of the Brexit agreement.
How do EU shipping changes since Brexit impact small business owners?
As we’ve seen, the UK-EU trade agreement has overhauled the way companies deal with one another on different sides of the Channel. So how does shipping to Europe work for a small business now Brexit is done and dusted?
Preparing to ship goods
Follow these steps to get started:
- Check export duties and rules in your destination country. You’ll also need to apply for licences or certificates if your products are deemed sensitive.
- Apply for an EORI number and decide how you’re going to make customs declarations.
- Choose a transport method for your goods, and ensure any drivers have the correct licences to travel internationally.
- Make sure your goods are properly classified by finding the right commodity codes.
- Attach completed invoices and any licences to your goods before they leave the port.
- Ensure export records and invoices are securely stored in case the authorities need to review them.
Learning how to explain delays
Shipping to the EU can be a learning curve for a small business. Failing to attach the right documents to your goods post-Brexit could easily lead to hold-ups at the port, while severe weather may create long queues. Covid-19 offers an extreme example of what can go wrong, with lorry drivers forced to self-isolate and lockdowns tightening borders.
With all this in mind, it’s essential to learn the art of communication and ensure your customers are made aware of any setbacks. They’ll quickly find other suppliers if you fail to alert them of delivery issues. Delays may be inevitable from time to time – but poor communication is not.
Working out customer charges
It’s vital to take new Brexit rules into account when setting charges for your overseas customers. Building the costs of customs compliance, transport and potential tariffs into your charges will stop you from making a damaging loss at the beginning of your journey.
You’ll also need to think about updating your terms and conditions – especially if you sell goods directly to consumers. Make sure your policy on shipping to the EU is carefully worded and be clear on who is responsible for paying different duties.
Changing your prices
Tread carefully if you’re thinking of covering the costs of expansion with price hikes for existing customers.
As we’ve mentioned, shipping to the EU and other international markets comes with plenty of start-up expenses attached. So it may be tempting to raise your prices to ease the strain on your business. Just remember that doing so could simply alienate a loyal customer base which has taken years to build.
Bringing your suppliers closer to home offers one way of cutting down on the costs of trade with the EU. By switching to British rather than overseas suppliers, you’ll avoid any bureaucracy at the borders. You could even attract more customers by supporting and promoting your local economy.
Unlocking your full potential
Shipping goods to the EU may seem daunting as the UK moves on from the Brexit process. Yet with careful preparation and a positive mindset, expanding into European countries could help your small business unlock its full potential. With 446 million inhabitants, the EU is one of the world’s biggest markets., so a bit of research and strategic planning can go a long way.
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