Strategic considerations after UK Brexit

The Brexit has made trade between EU and UK more bureaucratic for Danish companies and there are many challenges and pitfalls that needs to be avoided.

UK Brexit is now a reality, but just before deadline EU and UK managed to negotiate a Deal and thereby avoiding a Hard Brexit. Though a deal includes no duty and quotas, then this only applies to goods originating from EU. In other words is your business selling goods originating from China, India etc. which are imported to EU and re-exported to the UK then VAT and duties will be imposed.

In addition, the common requirements concerning import and export applies, as UK af is considered a 3. country. VAT liability in UK has been imposed on certain ecommerce to British consumers as well as via digital platforms like Amazon. The Brexit has made trade between EU and UK more bureaucratic for foreign companies and there are many challenges and pitfalls that needs to be avoided.

We have listed a few strategic considerations a foreign company should observe:

  • How important is the UK market for your company, financially and marketwise?
  • Are you selling: B2C, B2B or via online marketplaces (OMP)?
  • Do you have an option to change trading and delivery terms?

Afterwards you may ask yourself these questions:

Should the UK market be abandoned?

- because the costs and challenges are too big compared to the activity level and the company should instead prioritize and focus on other countries/markets.

Can the terms of delivery be re-negotiated?

– because a foreign company can no longer deliver DDP (to B2B customers doorstep) without being registered for VAT. Are your B2B customer willing to take on the responsibility of handling VAT and duty without demanding a price reduction.

Should you act proactively?

– apply for a VAT registration and utilize this registration for your B2C as well as your B2B sales. If your B2B customers have not previously been offered DDP delivery, then you now can offer this service and deliver to the customers doorstep. Selling via Amazon will also require DDP delivery and a VAT registration.

TIMEVAT is a Danish partner specializing in foreign VAT in EU and non-EU countries. We have considerable knowhow on UK VAT and import / export and keep ourselves updated on the latest development. We have already assisted more than 150 Danish and foreign companies with their UK sales and is also ready to advise and assist you.