Few people could have fully appreciated the tangled web of complexity that trading in a post-Brexit world has turned out to be. , Fortunately, as a Brightpearl customer, you have all the tools you need at your disposal to fine tune your operational processes and respond to the changes quickly and efficiently.
So, if you’re trying to figure out what the heck your EORI is, or how you apply PVA or MFT (or indeed what they are to begin with!), this guide is a great place to start.
Brexit: A Quick History
Following a referendum in June 2016, the UK electorate voted to leave the European Union.
Four years in the making, the UK’s departure became formal on January 31st 2020. There then followed a transition period, in which retailers were able to trade as they had done before, running up to December 31st 2020.
With the transition period now ended, it’s important for retailers to ensure they are complying operationally with the new requirements of trading in the post-Brexit world.
For retailers and wholesalers trading from (or to) the UK, the most impactful Brexit byproduct is the removal of EU Free Trade agreements meaning the UK now has to think differently about:
- Import and export of goods to and from EU countries, including associated VAT payments, VAT refund claims and (potentially) custom and excise duties.
- State aid, including grants and block exemptions.
- Transport and logistics, including fulfilment.
- Product safety or eco-compliance, including packaging and labelling that references EU licensing.
- Copyright, trademarks and patents.
- Environmental industrial standards, including emissions.
- Transfer of personal data between the EU and UK.
- Mutual recognition of qualifications and relevant licences (including audit, banking and insurance licences).
What’s The Iimpact?
Fortunately, Brightpearl is fully equipped to enable retailers to trade in the post-Brexit world. Here is a breakdown of what you need to be doing, and how Brightpearl supports you doing in it…
So, What’s an EORI Number?
Firstly, to export goods from outside the UK, or import them into the UK, you will need an EORI number that starts with GB.
Make sure your EORI number has been added to your shipping integration/s to ensure that this is automatically included with each and every order.
Shipping from the UK to anywhere else outside the EU? World Trade Organisation (WTO) Most Favoured Nation (MFN) rules which (as well as a handy applicable tariffs tool) can be found here: https://www.macmap.org/
Ensure You’re Declaring Duty and VAT
You also need to declare goods when you receive them via an entry summary declaration because the goods are now eligible for customs duties and import VAT. You’ll need to find out the rates of duty and VAT that apply too (including VAT on services) and declare them within six months of the goods being imported.
Additional customer and product data fields
Customer data. When shipping goods outside of the UK, you’ll need to include your customer’s VAT and your EORI number. You’ll need to ensure that this data is held against the contact record in Brightpearl.
Brightpearl has a dedicated VAT number field for this, alternatively we offer custom fields too.
Product data. When shipping goods internationally you are required to specify additional product information such as:
- Commodity codes
- Commodity description
- Commodity composition
- Country of origin.
This information needs to be provided for every item which is shipped. W, without this information your shipment could get rejected.
As with customer data, Brightpearl stands ready with custom data fields on our side, as do our shipping partners.
Another new requirement is the need to specify (per order) whether it is paperless trade or not. For clarity, paperless trade is defined as any electronic customs documents being submitted electronically rather than physically being attached to shipments.
Some Brightpearl customers work with a third party shipping provider such as Shiptheory or Scurri to manage their shipments between them and the couriers they use. Whereas other businesses deal directly with the couriers themselves. Regardless of which route works best for your business, make sure that you’re keeping track of additional information required for customs, such as:
- Commodity codes
- Country of manufacturer
Postponed VAT Accounting (PVA)
We’ve introduced support for Postponed VAT Accounting (PVA) which allows UK businesses to account for imported goods from the EU (or Rest of the World) on the VAT return instead of paying upfront at the port.
You can read more about PVA and it’s benefits from our partner Sage here.
Marketplace Facilitator Tax (MFT)
Marketplace Facilitator Tax (MFT) is the concept that marketplace facilitators (deemed as any online marketplace) are responsible for collecting and remitting tax on retail sales made by (and behalf of) marketplace sellers. This being the case, Brightpearl has been fully MFT-ready for some time now.
For those who sell on Amazon currently, this will be a familiar concept which is generally referred to as Amazon Withheld Tax.
As you can imagine, the type of tax being paid differs depending on if you’re based in the UK (VAT) or US (Sales Tax), however the threadline concept is the same and only applies if you are selling goods located outside of your country or state and on an online marketplace:
Goods with a value of £135 or less located outside the UK and sold to customers in Great Britain are liable for UK Supply VAT. Likewise goods located outside the UK and EU and sold to customers in Northern Ireland will be liable for Import VAT.
Most, but not all, states have marketplace facilitator tax laws. See the link below from our partner, Avalara, for more details!
For a greater understanding of the complexities of trading in a Post-Brexit world, we strongly recommend further research into importing goods and exporting goods to and from the UK by using the tools linked.
Please also see the government’s interactive assessment for UK businesses trading in a Post-Brexit world.
Shiptheory also have some fantastic resources to give clarity where it’s needed:
- Brexit Shipping Lingo
- Product Data Checking Tool
- Northern Ireland: Post-Brexit Shipping Explained
- European Commission Acceptable Goods Description Guide
- Understanding the Rules of Origin in the Trade and Cooperation Agreement
Brightpearl customers who have any questions on the technical application of anything mentioned here, can reach out to our Support Team for advice.