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Wednesday, February 15, 2023
The consequences of Brexit - viewed from the other side
Please read this as written in a conversational tone. As an European, I didn't get to vote for or against Brexit, and it only affects my life in very minor ways. But as I just had one of those minor experiences, I just wanted to talk about how it is now.
I used to buy stuff from the UK all the time. That has to do with the fact that I am a German living in Belgium, my English is better than my French, and my Dutch is nearly non-existing. So I used to order things like games, books, or DVDs from the UK, if they were only available in the local languages in Belgium. Then Brexit happened, and I mostly stopped ordering from the UK. When I still do, I get a reminder why I shouldn't:
If you followed my blog, you might have read that I really, really wanted the board game ISS Vanguard. I had missed the Kickstarter, and when I "late pledged" it turned out that only put me on the list for a copy of the next print run, end of this year. So I looked around at an aggregator site for board game prices and availability in Europe. And while ironically *now* that site shows a wide availability of ISS Vanguard, at the time of me checking there was only one shop who had the game in stock. And that one shop was in the UK.
Now that UK shopped only delivers in the UK. I suspect that has to do with Brexit, but I am not sure. Anyway, having had previous experience with online shops that only deliver nationally, I use a forwarding service. With the UK games shop doing "free" national delivery, the shipping cost of the forwarding service aren't actually much higher than usual international shipping fees. So I decided to do that for ISS Vanguard. Thinking, to quote Top Gear, "How hard can it be?".
Well, "hard" maybe not. But "slow" and "expensive" certainly. ISS Vanguard in the UK cost me £112, or about €125. But there is a 20% UK VAT on top of that. And by importing the game myself, without having the proper means to recover VAT, I ended up paying Belgian VAT *on top of* the UK VAT. Plus €37 for custom fees. And the Belgian VAT was not calculated on the actual price, but on a higher estimate of the value of the goods in Europe. So in the end, with all fees, shipping cost, and taxes, I ended up paying a total of €236, nearly twice the original cost of the game. In addition to that, there was the wait. Basically the box was stuck in customs for over two weeks. From the time I ordered the game to finally receiving it, it took three weeks.
None of this is really surprising, if one understands what a "common market" is, and what the likely consequences of "leaving a common market" are. But with all the added cost and delays it has become quicker and cheaper for me to order from the United States than to order from the United Kingdom. Trade from the UK to Europe has fallen by 16%. But the trade that has disappeared is disproportionally concentrated at the smaller scale. A small UK shop selling to consumers in Europe is hit much harder by Brexit than a multi-national company, because the large companies can easier deal with the paperwork for VAT and the like, especially with repeat B2B business. I will think twice before ordering from a small UK shop again.
- posted by Tobold @ 9:27 AM Permanent Link
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Ireland is an even smaller country than Belgium and we used to rely on UK suppliers for anything too special or niche to have an Irish presence. Then Brexit happened and a lot of those smaller suppliers cannot handle the hassle of exporting so we now have to look further afield. Armed with Google translate we look for suppliers in France and Germany instead.
I actually tried to figure out why it costs so much to import stuff from the UK despite there being a Free Trade agreement in place (EU -UK Trade and co-operation agreement). In the first instance the free trade agreement only covers good made entirely in the UK. If the goods have significant parts from outside the UK (as in almost everything) then normal customs rules and duty apply. You then have to wade into multiple layers of tariff sheets to find out what duty applies. The duty might only be a few percent or it could even be zero but the paperwork involved make it too much hassle for all but the largest suppliers. Then you have to deal with non aligned VAT rules and probably end up twice.
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I actually tried to figure out why it costs so much to import stuff from the UK despite there being a Free Trade agreement in place (EU -UK Trade and co-operation agreement). In the first instance the free trade agreement only covers good made entirely in the UK. If the goods have significant parts from outside the UK (as in almost everything) then normal customs rules and duty apply. You then have to wade into multiple layers of tariff sheets to find out what duty applies. The duty might only be a few percent or it could even be zero but the paperwork involved make it too much hassle for all but the largest suppliers. Then you have to deal with non aligned VAT rules and probably end up twice.
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