The end of the Brexit transition period is already impacting the cycling industry – and while the dust is likely to be settling on the UK’s new relationship with the EU for some time to come, and what the implications of that might be, we’re beginning to get an idea of a few of the emerging issues.
We suspect that it will take several weeks at least for the situation to become fully clear for a number of reasons, not least the ongoing disruption caused by the coronavirus pandemic.
Another issue is that with the deal between the UK and the EU only signed off on Christmas Day, and last Monday effectively being the first full working day back on both sides of the Channel, many businesses simply will not have had time or resources to wade through the documentation and assess the implications of the new relationship.
One change that has hit the headlines is the UK’s new rules on value added tax (VAT) and its impact on brands and retailers in the EU selling to customers in the UK – with some having suspended, whether temporarily or permanently, sales to consumers here.
As we reported last weekend, online retailer Dutch Bike Bits – owned by David Hembrow, the long-time cycling campaigner who moved from the UK to the Netherlands in 2007 – says it can no longer accept orders from UK customers due to a change in VAT rules. The story has subsequently been picked up by the mainstream media, including the BBC.
> Dutch bike part dealer shipping to every country in the world except UK because of Brexit VAT change
We’ve also seen Brooks England, which makes its saddles in the West Midlands, suspend orders via its website to shoppers in the UK, because goods are dispatched from its parent company’s facility in Italy. Its products are still available here via bike shops, and while the company hasn’t said that the VAT changes are specifically to blame, we suspect they are part of the equation.
> Brooks England stops online sales of ‘Made in Britain’ saddles to UK shoppers – because of Brexit
Campagnolo too has said that “all sales with delivery to the UK are suspended until new updates,” pending “EU dispositions with regard to the Brexit situation.
HM Revenue & Customs (HMRC) says that with effect from 11pm on 31 December, when the transition period ended, consignments of goods with an aggregate value of £135 or less (excluding shipping costs) will have VAT added at the point of sale, whether in the EU or elsewhere abroad.
That means that brands or online retailers based abroad that sell directly to shoppers in the England, Scotland and Wales (separate rules apply to Northern Ireland) must register with HMRC for VAT and account for the tax on goods sold here below that threshold, including paying an annual fee to do so – something that Dutch Bike Bits, to return to that example, says makes it impossible to continue selling to people here due to the costs and the administrative burden involved.
The rules are similar, to some extent, to ones drawn up by the EU to modernise VAT for cross-border e-commerce that were due to have come into effect on 1 January but which, due to the coronavirus crisis, have been pushed back until 1 July – the big difference, of course, being that the UK is now a third country.
HMRC says that the rules do not apply to goods sold through online marketplaces (OMPs) “where they are involved in facilitating the sale,” with the OMP being “responsible for collecting and accounting for the VAT.”
So, signing up to an OMP such as Amazon, the world’s largest retailer full stop, might appear to remove a lot of the burden for small businesses in the EU looking to sell into the UK – except for one crucial change the online giant made towards the end of last year.
As of 18 December, with the end of the transition period looming, Amazon dropped the UK from its Pan-European programme – meaning that retailers in the EU wanting to sell to customers in Great Britain would have to fork out to ship their goods to the company’s warehouse here, something for which Amazon previously footed the bill.
Other issues we are aware of include increased shipping costs, both as a result of Brexit with carriers specifically increasing their rates from the EU to the UK due to the additional paperwork involved, and due to shortage of containers globally chiefly resulting from the coronavirus pandemic, as well as confusion regarding what are termed ‘rules of origin’, and we will be looking at those separately in the coming days.
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I really don't think there will be any specific projections for each and every possible trade permutation and I have not come across anything so detailed.
There is post referendum analysis showing the UK outgrowing the rest of the G7 and remaining a top tier economy through to 2050 based on expanding trade links with rapidly growing emerging markets.
It was produced before Covid hit though so not sure how applicable it remains but here it is anyway.
https://www.pwc.co.uk/who-we-are/regional-sites/northern-ireland/press-r...
I agree that we're unlikely to change each others minds about this so yes perhaps it is time to call it a day!
I think a better analogy would be that it was a Team Time Trial and we have decided to move out of the team and try and beat our previous team mates alone. Whilst seriously disadvantaged, we'll be frantically looking around for another team, or a group of individuals with little to no team structure, who will allow us to join them, and if we are allowed to join, hoping that we can perform better than our previous team. Hopefully we will still be on a TT bike and haven't switched to, or been made to switch to, a BSO 😉
Personally I try not to view life as a race or a competition, but I am an old almost hippy 🙂
This is not untrue but is an attempt to sidestep the issue.
Can you confirm that those goods came direct from the country of origin? Or could they have been delivered via an EU country? (this is a quite likely)
IMHO it would be inadvisable to bury one's head in the sand regarding the increasing complexity in transporting everything to and from this island via its nearest neighbours, who are often both our biggest customers and suppliers. And that applies to a huge proportion the products we want and need, not just fresh food.
I think it's rolling the dice a bit to talk about global GDP and so on; regardless of predictions made by specialists, the average Joe or promises made by lying politicians, those were not the real reasons people voted to leave the EU.
On a personal level I'm just hoping that my Polish dentist, the permanent and locum GPs at my local practice and the hundreds of foreign nationals working at our hospital don't leave the UK and go to work elsewhere. A former colleague who runs a large veg farm near here relies on overseas workers and is also anxious that they may struggle to get/retain decent staff to pick, sort and pack the root veg that is on offer in the supermarkets and elsewhere. I wonder who would plug those gaps?
Can you confirm they didn't come directly here?
That is also quite likely.
Is it impossible to deliver goods directly to the UK?
I also hope that none of the valuable immigrants decide to leave, now that we no longer have to favour EU immigration it should actually be easier to attract the best people from anywhere in the world to fill vacancies we can't fill with our own citizens.
I don't have to prove anything. The point is that you don't know how they arrived here so it undermines your argument.
And according to the Guardian (is that another 'biased source' like the FT?), in normal times 6,000 to 9,000 HGVs cross the channel daily. That's a hell of a lot of stuff. The story below is about the delays that are now holding up UK drivers in Calais. This costs money. Real money.
https://www.theguardian.com/politics/2021/jan/08/stuck-lorry-drivers-cal...
I'm sure these things can be smoothed out in time (and they need to be!), just as I'm sure we can strike favourable trade deals now we're out of the EU; but unfortunately these things don't happen in 5 minutes. Nothing was done to prepare us for Brexit in the last 4½ years. I really do hope that we come out of this mess in a better position than we are now. It would be great if we were better off - and I don't mean just the UK economy - than when we were in the EU. However, since Brexit has already cost the UK many billions of pounds (£130 billion, 12 months ago) and is still going to cost billions more, those benefits seem a very, very long way off right now.
And I find it saddening that too many pro-Leave commenters have no time to consider the extra stress, hugely increased workload or, even worse, those lose their jobs or businesses in the meantime. Instead there is this "suck it up, loser" gloating mentality. That's really not a good look (which applies to all of us, whichever side of the argument - any argument - we are on). But so far we're all potential losers, the only winners I can see are the fat cats and tycoons.
Edit: I'm now on the Graun's Business section home and the headlines are "Firms halt deliveries from UK to EU over Brexit border problems", "M&S Percy Pigs in Ireland hit by Brexit red tape" (they're made in Germany for M&S BTW), "Brexit delays and costs 'pushing Scottish seafood firms into crisis'" and "Brexit and Covid blamed as Asia-UK shipping rates increase fourfold". I know it's early days but this really does not suggest that we are heading for a big uptick in our economic fortunes.
You have a strange view of how discussions work.
This was what you originally said:
I merely pointed out that sourcing perishable items from distant countries is so routine that your average supermarket has myriad examples.
You then claimed I was sidestepping the issue and had to prove those items came straight here.
Clearly that was not required to disprove your point and even if the items were not shipped directly here, (which neither you nor I actually know) it's not exactly hard to imagine that they could be if needed.
Your original point that sourcing perishable items from distant countries represents some sort of insurmountable challenge was shown to be false.
There will undoubtedly be people who are worse off due to Brexit just as there were undoubtedly many people who were worse off due to being in the EU.
The reality is that we held a democratic vote and decided to leave, now that we have actually left there is no alternative but to make the best if the situation.
Top trolling querying the politics of an FT and former Telegrpah journalist and then citing a piece of work from the CEBR - an organisation which has found a niche in producing work that tries to muddy the waters on things like climate change, road safety and healthcare spending.
I'm unclear what point you're trying to make?
We shouldn't consider bias when we critique a conclusion? Or we should?
The head office of the company I used to work for has moved to Bruges. I say "used to work for" as I have been made redundant as a direct consequence of Brexit. I no longer have a job and a prospective future trade deal isn't going to feed my kids. This isn't a win for you, me or the UK.
Think you may have inadvertantly hit on a solution there. Our Cheese and whiskey and gin is a good psudo currency. We could swap things for bike components - surely this would avoid imports etc? Maybe Noel edmunds could lead the effort? A full campag groupset at £2k only equates to a mere 252 Kg of mature cheddar (@£7.91/kg), or 1170 Melton Mowbray pork pies.
That's an emmental idea
Yep - I can see several holes in that plan right away.
I've just heard amongst all the U.S. news that Trump is about to ban imported shredded cheese.
He wants to Make America Grate Again
Whether you receive payment in the form of money or by barter HMRC will still expect you to pay them in cash for the VAT that would have been due.
https://www.gov.uk/guidance/vat-part-exchanges-barters-and-set-offs
That particular attempt to reduce tax payable is almost as old as tax itself.
Thanks for granting permission
I'm sure we've all got plenty more to use!
Tell me the bus one again.
That's still my favourite even though I've heard it at least 350 million times.
As a small business owner - its a real problem.
Thank you to everyone who voted for this sh!t show - you were at pains to tell us you knew EXACTLY what you were voting for...
Add PEdALED to that list too as their stuff gets shipped from Italy if you buy direct.
PEdALED who were owned by Brooks of England, who became part of Selle Royal,that PEdALED you mean ?
If its economically in their interest to sell their stuff to the UK,they'll find a way, just like they find a way to ship globally without constant inches of news columns devoted to it.
Can't wait for my first trip to a race abroad, taking a team car, with several high value bikes, all the equipment...I've already been told by a friend who works the port, have copies of all receipts, inventory list for everything in the car/van that someone can sign, which can then be checked on return to prove that you aren't shipping new bikes around to avoid customs.
I have to go through a similar process when taking all my tool kit and equipment into certain countries like Canada and America, where I sign a declaration to say that I am here for a set amount of time, with the tools I have to work with and will be taking them home with me, none will be left, sold or given away.
Then if you go with a junior team as I have a number of times, anyone under the age of 18 is required to have a parental letter stating they are with you for the purpose of sport...etc etc etc. Funny, these were only ever checked on returning, never on outboard ferries...
You're assuming that you will be able to make it on to boat and out of the country in the first place 🤔
And thankyou to all the idiots who thought they'd get something better (when obviously only the rich will do well out of brexit), you've messed all the posting to Ireland up too, cheers for that. Selfish gammon idiots with big mouths and no brains who believed a rich stockbroker and a load of privaliged etonions who said brexit is great for the common man/woman. The only thing you get is a lot of problems and when they do eventually calm down you'll be no better off in life. You'll still all be moaning about something, or more likely everything and still be ruled over by exactly the same privaliged few. But you got your country back, in a right mess with everyone hating each other but at least I'm out of the place and don't have to deal with these donuts now.
And there you have it. The Remainer way. Everyone who voted leave are idiots. Not like the very clever people who voted to remain shackled to the undemocratic corrupt EU.
Footnote: If the vote had been to remain, would the Leavers have thrown their toys out of the pram and gone on, and on? No, they would have just accepted it. Tell me, if tthe vote had been 48% leave, 52% remain, would you have been happy for leavers to campaign for another vote?
No? Thought not.
Best joke I've heard all year!
If Remain had won we might not have seen a 'storming the Capitol building' level of physical aggression but no doubt there would have been repercussions. Nigel said that if Remain won and it was a close thing then the Leave.EU campaign would not let it lie; and since we had already seen widespread skullduggery and dishonesty on their part then I'm sure it would not have been "a clean, fair fight".
But I don't subscribe to the PoV that Leave voters or those who 4 years later still think Brexit is a good thing are stupid, ill-informed or plain wrong. I think it's far too early and far too complex to even consider whether either side of this simple binary referendum could be right or wrong. I don't have any strong personal views, ties or investment either way. If Brexit works out well for the UK population in general then it will be a huge relief though I don't see the elevated racism and vitriol disappearing and I don't think the underlying structural problems will be dealt with. There are surely going to be some gains and I sincerely hope they outweight the losses. But so far we've had very little indication of those benefits becoming reality and lots of evidence of drawbacks.
The Leave campaign's methods, combined with the personal attributes of some of its most prominent champions and its likely beneficiaries as a bunch of sketchy racists and shady moneygrabbers has contributed massively to why so many people feel so strongly about it and are extremely concerned about it. Many on the pro-Brexit side don't want to acknowledge any of that, which leaves it as something of 'a festering wound', one could say.
I have no side. I just see the pointless stupidity in creating a massive mess for no real gain. Please please tell me exactly how your life will now be so much better? I've only ever got one honest answer from a friend who voted leave and that was purely because he wanted some real creosote. He is still not sure weather he will get it though.
But I still think anyone who claims things will be so much better when they are even now still unsure how it's going to work out is an idiot (or a fortune teller/soothsayer/clairvoyant). You can hope it works out better but thats about it. For my family still in england I hope it does.
More powerful vacuum cleaners...?
I actually saw a vacuum cleaner expert talking about this and he said the design is far more important than the power. I clean for my mother in law and when her old one packed up she bought a new supposedly high powered one and it's rubbish TBH. It all depends weather you have a hard floor or carpet and weather you own hairy animals. Different hoovers work better in different situations. I completely agree with what the expert said. And don't get me started on dusters.......
Also, will more powerful hoovers be allowed now? And will they be shipped to this part of the world if the rest of europe dont use them? I havn't a clue on that.
I mean who knew leaving frictionless trade would be barriers on (checks notes) trading? FFS.
Were you misold Brexit then call our no win no fee team now.
But... But... But: "Sunlit uplands"... "Best trade deals ever"... "Oven-ready"... "Jumpers for goalposts"...
World leading, world beating, the wheels on the red bus go round and round trade deal......
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