Marco Pericci /

Brexit and e-commerce: what changes for those selling and shipping to the UK

Brexit, or the end of the membership of the United Kingdom to the European Union, in force since 2020, has profoundly affected the dynamics of sales, shipping and logistics for all companies that sell, physically and online, in this country. Those who own and manage e-Commerce will have to adapt to new rules in order to continue selling and shipping their products to the United Kingdom. This requires making necessary changes, otherwise brands will see an important slice of their market disappear.

Brexit and e-commerce: what changes for those selling and shipping to the UK

illustration of Nicola Giorgio

This article will help you understand what these updates are, how to effectively implement them into your e-Commerce and how the main Italian carriers are adapting to the new protocol required by Brexit.

Shipping to the United Kingdom with Brexit: general information

Purchases made through e-commerce are on the rise all over the world. In the last two years, increasingly more consumers have chosen to buy purchases via online stores. These changes have also been a result of the worldwide restrictions on mobility the past two years, due to the healthy emergency caused by the Sars-cov-2 virus.

British users are no exception: according to the latest data, 45 million consumers in the United Kingdom shop online regularly. Additionally, half of them buy products from foreign brands and B2C (Business2Customer) purchases are those with the most transactions.

Therefore, the validity of Brexit has made it necessary for most online store managers to update and change their fiscal and logistical point of view to be able to continue interacting with the high number of buyers.

The TCA (Trade and Cooperation Agreement): what does it consist of?

The Trade and Cooperation Agreement (better known as TCA) is the agreement signed on December 24, 2020 between the United Kingdom and the European Union, which regulates all the commercial agreements and their modalities following the adoption of Brexit.

The TCA involves the exchange of goods and services, the energy sector, public policy, the free movement of people, the air and road transport sector, fisheries and the United Kingdom’s cooperation in the European Union’s projects.

Those who sell online will certainly be interested in knowing that according to this argument, the free exchange of goods and services is allowed, but customs formalities change between both parties involved, specifically the VAT payment in addition to other imports.

What does this mean? That although additional fees will not apply in most cases, European and British sellers must equip themselves with certain requirements, codes and forms necessary to ship their goods to the United Kingdom territory (except Giblitar which isn’t part of the agreement) and vice versa.

Now let’s see which ones and how to obtain them.

EORI number for the EU: how to request it

To sell and export your products to the United Kingdom or to import them in the EU, from January 1, 2021, you are obligated to obtain an EORI number (the acronym that identifies the Economic Operator Registration and Identification).

This code is already mandatory for anyone wishing to export or import products into the territory of the European Union. According to the clauses of the TCA, the seller’s EORI number must be registered with the authorities of the country where you intend to ship. Therefore, a generic EU EORI number is not recognized in the United Kingdom and a generic UK EORI number will not be considered valid in the EU.

How can you recognize an EORI number? It’s very simple:

  • The first two letters represent the code of the country of origin (for example, it’s IT for Italy)
  • These two letters are then followed by the first 15 digits that make up the company’s tax code

The procedure for requesting it is generally simple and intuitive and can be done using the forms made available by the Office of Customs in your country. 

Customs, delivery times and returns

Customs rules change but not all procedures will be affected. As we said, duties will not be automatically applied, according to the current situation and various agreements signed between the EU and UK, but it will be necessary to inquire before proceeding because some products may require additional forms and certifications. For example, health and herbal products.

Since the start, one of the main concerns of those who sell and buy through e-Commerce has been that Brexit would increase delivery times on both ends, especially due to the additional forms required to cross customs borders.

Apparently, the current dynamics and timing should not undergo big changes: the main Italian and international carriers have adapted their logistics to the new situation, guaranteeing, in most cases, the delivery of even large pallets in 6-8 working days, while it’s possible to receive deliveries with air freight in 2-3 working days.

In these cases, however, returns management can have longer processing times. The return of a product to the country of dispatch must be accurately documented, which will inevitably imply additional costs for companies that sell through e-Commerce. 

Some big names in the sector, such as Amazon, have already declared that they will cover the returns fees only for products that reach their destination with damages or manufacturing defects.

Otherwise, the consumer will have to pay a surcharge, necessary to cover the shipping fees.

The fiscal part: invoices, VAT number and declaration forms 

The correct filing of invoices will be the key to avoiding major customs delays. In fact, the commercial agreements planned in accordance with Brexit provide a timely declaration within each invoice in addition to the self-certification forms required by Customs.

In general, it will be useful to remember that any shipment, whether directed from the European Union to the United Kingdom or traveling the opposite direction, absolutely must be accompanied by a commercial invoice that contains all the information that allows the Customs authorities to know the details of the sender, the content, the recipient, and in general the commercial relationship that regulated the shipment.

The quickest and most effective solution is to pay particular attention to the compilation phase, but above all to send invoices electronically. In fact, most carriers have implemented various software that can manage the electronic sending of invoices, avoiding delays and mistakes.

Finally, the VAT payment will be handled differently between imports and exports. Taking Italian e-Commerce as an example, if a product is shipped from Italy to the United Kingdom with a value of less than 135 pounds, the seller will have to register on the Her Majesty’s Revenue and Customs portal, the British Tax and Customs Revenue agency, and obtain a UK VAT number which from that moment must be entered strictly on any invoice with a value lower than this figure.

Is your e-commerce ready for post-Brexit changes?  

So far we’ve seen an overview of the new rules that took force with Brexit and how this will change the export and import methods for European e-commerce.

But how can we be sure that our e-Commerce is ready to satisfy all these new requests? Let’s look at some important details that will help us answer this question.

Which categories will suffer the most from Brexit?

Not all e-Commerce will be equally involved in the new trade exchange policies. According to the results from this almost first year of Brexit, the categories that have suffered from the most changes are:

  • Online European shops that sell directly to British consumers (hence B2C)
  • All United Kingdom online shops that sell both nationally and in the European Union
  • National and international companies importing goods from the United Kingdom
  • National and international companies that sell their goods in both the EU and the UK. 

What changes if you sell both in the United Kingdom and the EU?

If your online store, as in most cases, sells both in the United Kingdom and in the European Union, it will be necessary to provide a dual channel for sales, shipping and billing. You will have to set up all the features of your e-Commerce by treating the markets separately, and you need to make sure that you follow the rules each state has established under the international trade agreements. 

Incoterms: why you have to predict them to ship safely

As you may have understood, juggling all the new provisions, rules and forms is not easy. If you add to this the fact that each country has its own commercial “language,” the situation is even more tangled. 

One thing that can really make the difference for your e-Commerce and for the management of all the steps are Incoterms, an acronym for International Commercial Terms, i.e. the contractual terms that regulate international exports and imports. They can be signed in writing by both parties and all the details they contain must be reported on the invoice. How does this help you?
It will be easier to process your shipments during the check performed by Customs because the checks will be more streamlined and the competent authority will immediately have all the necessary requirements at hand.

Here’s how to compose the invoice according to the Incoterms you signed:

  • Indicate the final destination of the goods
  • List the person responsible for the insurance of goods and who is responsible for paying the insurance premium
  • The freight that’s taking care of the transport and related payment
  • Who carried out the customs procedures and paid any taxes, fees and duties.

Brexit and shipping: updates from the main Italian carriers

All the innovations foreseen by the introduction of Brexit have been adopted by the main Italian couriers with new procedures, adjustments and tools capable of satisfying the international laws on one hand and the needs of sellers and consumers on the other.

Brexit and e-commerce: FedEx updates

FedEx has implemented various software to make the shipping and billing process smooth and user friendly for its customers.

One of these is the ETD (Electronic Trade Documents): after completing registration, customers can send their invoices through this software electronically. Also within the ETD, FedEx has created a space dedicated for Post-Shipment Document Updates (PSDU) that lets you attach all customs documents and waybills in just a few steps.

Finally, FedEx has created a very useful checklist on its website to help you understand the things your e-commerce is missing to safely ship your goods in the United Kingdom.

Brexit and e-commerce: UPS updates

A section dedicated to Brexit has been created on the UPS website with all the details necessary to prepare a shipment correctly. The section of Frequently Asked Questions is particularly useful because UPS collects all the main topics users request most often. This way, it will be easier to access the information you really need.

UPS has also implemented new simplified management systems for shipping flows, from sale to delivery. The UPS Paperless™ invoice is the electronic invoice sending system designed to drastically reduce customs delays; on the other hand, UPS World Ease® allows you to get your shipments cleared by customs more easily even in cases with multiple recipients; finally, UPS TradeAbility® further simplifies the preparation of documents and the flow of goods by helping you keep track of the tariff codes indicated for each country.

Brexit and e-commerce: DHL updates

The carrier DHL created a practical shipping guide that can be consulted on DHL’s official website. 

In particular, DHL’s services are distinguished between subscribing customers and non-registered customers. Even if you are not registered, you can consult a 10-step guide to help you prepare your shipments correctly and avoid the main customs delays on the DHL website in the section dedicated to new Brexit rules.

Brexit and e-commerce: updates from Poste Italiane

If written guides are not for you, then the Youtube channel of Poste Italiane is the solution.

In the #TgPoste section, you will find a guide in video format to the new Brexit rules explained clearly and in detail.

Poste Italiane’s in-depth analysis concerns both company and private sales and provides a series of precise details divided according to the commercial category to which they belong. Furthermore, the additional costs on shipments that Poste Italiane serves the right to apply in some cases are also indicated. 

Brexit and e-commerce: Bartolini updates

The instructions for Bartolini shipments can be consulted easily from the company website, including a detailed list of goods that CANNOT be exported to the United Kingdom. 

Bartolini also made its own guide to illustrate all the changes expected as a result of Brexit. BRT’s facsimile templates provide a visual idea of the necessary forms to always keep handy. 

Share post
Marco Pericci

Written by:

Marco Pericci

Head of Growth

User explorer. I dream of a world where automation makes humankind happy.

Illustration of:

Nicola Giorgio

Freelance illustrator / graphic designer

Nicola Giorgio è un illustratore freelance con base a Firenze. È parte di Muttnik, collettivo che si occupa di progetti di comunicazione visiva e di illustrazione con particolare attenzione nei confronti delle realtà culturali, espositive e aziendali. Di recente ha fondato La Sedia Blu, associazione che si occupa di promozione alla lettura, attività laboratoriali, corsi di formazione e eventi legati al mondo della letteratura per bambini e ragazzi.

Nicola Giorgio