Skip to main content

Practical Advice on Brexit Preparations

Last Updated: 9 December 2020

Disclaimer:

This document has been written by Josh Barling, CEO of Sellerdeck, and is information gathered from multiple resources with the intention of providing practical advice to Sellerdeck customers. Sellerdeck cannot take responsibility for the way readers use and apply this information.

On 31 December 2020 the UK will leave the EU customs union and single market, either with or without a free trade agreement.

From 1 January 2021 there will be a customs barrier between the UK and the EU.

This document outlines key areas that will impact UK eCommerce businesses with practical advice on solutions for Sellerdeck customers.

Sellerdeck Desktop customers who sell and ship goods into the EU.

Sellerdeck will provide the updates required, by the first week of December 2020. The updates will be provided for versions 16 and 18, legacy versions will require a manual step and will not include the full feature set.

We will email all customers once the release is available.

Introduction

Sellerdeck has considered the actions required for eCommerce businesses using Sellerdeck Desktop. This document highlights the key areas and actions required to minimise the impact from Brexit.

Below are the key areas:

  1. Sellerdeck Desktop configuration and integrations: how does your setup affect this?
  2. VAT: what are the changes in relation to VAT when selling goods outside of the UK?
  3. Shipping: what information does your carrier require to deliver your orders?
  4. Online market places: what are the differences?

NOTE: we do not cover product import, please ensure you research this separately.

While reviewing the information and considering solutions, its important to think about what you want to achieve beyond adhering to the rules. Here are the key areas we believe you should consider:

Frictionless customer experience:

We believe the key to success is continuing with a frictionless experience for the customer, so that order volumes remain and you can invest further into the international markets.

Customer Service:

There is a chance you will face challenges which will result in unhappy customers; likely caused by delays or failed deliveries. Set expectations correctly and have processes and guidelines in place for handling the frequent potential problems.

Profitability:

Higher shipping costs and import duties will no doubt affect your profitability. Certain products or countries may no longer be viable to ship to. Ensure you are reviewing costs and analysing your profitability to make informed decisions.

New patches for versions 16 and 18 are now available. This patch will address the new data fields required (The ERORI number, HS Code and Country of Origin) for upcoming Brexit changes.

Please read heading 3 for more information on ERORI number, HS Code and Country of Origin.

To find out more about the patch, please visit our knowledge base article here.

To download the patch for v18.0.5, please click here

To download the patch for for v16.0.7, please click here

All legacy versions (v14 or below) will be a manual process and will be addressed through knowledge base articles which we will release shortly.

Sellerdeck Desktop can be used as the entire eCommerce platform from capturing an order to fulfilling it; or used as part of the overall platform.

The impact from Brexit will affect businesses differently depending on their platforms and integrations.

The key areas to consider are:

  • VAT settings and management
    • This is always managed in Sellerdeck Desktop through the Business Settings (we explain this later on)
  • Data held against products
    • Although Sellerdeck Desktop will hold product data, if you have an integration with Sage Accounts or another platform, the Sellerdeck Desktop data may only be a mirror of these other platforms and not the master location
  • Delivery Information
    • Your carrier will require information about your business and the products being shipped. This must be passed to the carrier, either manually or using an integration. If you have an existing integration you will need to ensure the data is exported

ERP / Back Office Platforms

If you have an integration between Sellerdeck Desktop and an ERP or Back Office platform, then the changes required are likely to be needed within that platform.

Contact your provider if these statements are true:

  • It holds the master data of products
  • It processes orders (including raising invoices and delivery notes)
  • It integrates with your carrier

There may be scenarios where the integration between Sellerdeck Desktop and your other systems require an update to the integration. In this situation, speak with the company who built or manages that integration. Sellerdeck Desktop has the required fields so the integration is likely to just require an update to incorporate these fields. NOTE: please ensure you do this sooner rather than later as it will likely need scheduling by your provider.

Sellerdeck Sage Link

Sellerdeck Desktop has an out of the box integration with Sage Accounts. There will be an update to the integration so that the additional required fields are added. However this is dependent on how Sage Accounts manages the data in its platform.

Actions:

  • Speak with other platform providers if appropriate

Please note that Sellerdeck is not best placed to give advice or answer questions on VAT. Always ensure you check with qualified persons to ensure you are conforming to the laws exactly. Below is our understanding and interpretation of the changes:

From 1  January 2021 sales on goods sold to the EU can be charged VAT at 0% (known as ‘zero rate’); this is applicable on most goods you export to the EU. A zero-rated VAT supply is one which is subject to VAT but where the VAT is at 0%.

https://www.gov.uk/guidance/vat-on-goods-exported-from-the-uk-notice-703

However, import tax and duties will be applicable to the goods you send. Therefore either you must submit a customs declaration form, or use a business (likely your carrier) to do this for you.

Given the complexity of doing this yourself, it is often preferred to use your carrier to manage import tax and duties requirements.

Speak with your carrier to see if they can offer you this service.

You may already have a ‘Tax Zone’ created in Sellerdeck Desktop which you can amend to match the changes in VAT charges. However, if you do not, then the default installation of Sellerdeck Desktop does, so you could licence a new site or download the trial version to view the default setup.

Sellerdeck Desktop has a comprehensive system for managing VAT settings, which is controlled in the ‘Business Settings’. In this area you can manage your ‘Tax Zones’ to apply specific VAT settings to specific countries:

When selling into the EU you will need to create an EU Tax Zone which has zero-rated tax. It’s important that you do charge VAT but the amount charged is 0%.

To see how to edit and create Tax Zones, find the article ‘How do I charge different tax rates to different countries/states?’ in the software main help (Help > Help Topics > Search).

The list of countries affected by this change is in the appendix. You must ensure the correct countries are applied to the correct Tax Zone so that you charge the correct VAT.

For VAT purposes the ‘exporter’:

  • supplies or owns goods and exports or arranges for them to be exported to a destination outside the UK or EU
  • supplies goods to an overseas person, who arranges for the goods to be exported to a destination outside the UK or EU

An ‘overseas person’ is a person or company who is not a resident in the UK or has no business establishment in the UK from which taxable supplies are made, or is an overseas authority.

Actions:

  • Setup Zero-rated VAT. Details on how to apply this in Sellerdeck Desktop can be found in the ‘Advanced Tax Setup’ article in the software main help (Help > Help Topics).

Managing Import Tax and Duties

There are two ways of managing import tax and duties:

  1. Delivered Duty Paid, known as DDP, is essentially the process you follow where you (the merchant) or the carrier pays the tax and duties directly and prior to the customer receiving the goods.
  2. Delivered Duty Unpaid, known as DDU, is essentially the process when the consumer pays tax and duties before being able to collect the goods.

To ensure a frictionless customer experience, we suggest you use DDP and outsource the management of export to your carrier who will manage the customs forms and import tax and duties. Although this may cost you more, it saves you time, ensures a higher delivery success rate and minimises friction for the customer.

NOTE: AEO status

AEO Status (Authorised Economic Operator): AEO is an internationally recognised quality mark that shows a business has a secure international supply chain and customs controls meet EU standards. It is not mandatory but can fast-track shipments through customs procedures.

Ensure your carriers have this status.

If you want to manage customs declarations yourself, please find more information here:

https://www.gov.uk/guidance/customs-declarations-for-goods-taken-out-of-the-eu

Shipping Costs

Ensuring you charge the appropriate amount for shipping is key, so you should review your ‘Shipping and Handling’ configuration in Business Settings. In this area you can amend the costs of different shipping services by zone, therefore charging appropriately for EU countries:

For more information see the articles ‘How do I set up shipping charges?’ and ‘How do I charge a group of countries/states in the same way for shipping?’ in the software main help (Help > Help Topics > Search).

IMPORTANT

  • Ensure that you select ‘Zero-Rated’ VAT, as you will be charging VAT at 0% for deliveries into the EU

There are also additional shipping options against each product if certain products require a ‘Handling Supplement’ due to the type of product (i.e. hazardous goods):

Delivery Details Page

There are likely to be changes in costs, delivery timescales and your terms and conditions surrounding deliveries into the EU. It’s important that you clearly display this on your delivery details page so that consumers’ expectations are correctly set; this will reduce customer service enquiries.

Delivery is becoming an increasingly important part of the buying decision and so choosing the right carrier can have a positive impact on your conversion rate.

We recommend displaying which carrier you are using and the benefits they offer, including tracking and updates.

Returns

Your carrier can offer services around this and it’s likely that you will benefit from a smooth management of returns, so we suggest you speak with your carrier and enquire about these services.

EORI Number and Licences

If you’re already selling outside the EU, then you are likely to have the required setup to ship goods to the EU when the UK leaves.

As a business, the two key pieces you require are:

  1. Licence for exporting certain goods

Some products require a licence to ship outside the UK. To see if your products fall into this category visit the gov.uk website page – https://www.gov.uk/starting-to-export/licences

  1. EORI number

An EORI number is required to trade goods with countries outside the UK, or to trade with the EU. From 1 January 2021 you’ll need an EORI number, which starts with ‘GB’.

It’s free and only takes 5 minutes to apply. Once completed, you’ll get the number either straight away or within 5 working days. To register visit – https://www.gov.uk/eori

HS Codes or Commodity Codes (known in Sellerdeck Desktop as ‘Trade Tariff Code’)

‘HS’ stands for Harmonized System and was developed by the WCO (World Customs Organization) as a multipurpose international product nomenclature that describes the type of good that is shipped.

All products have an HS Code which is used to calculate the import tax and duties.

HS Code is also known as a Commodity Code; however, it is different to a HTS Code (Harmonized Tariff Schedule), which is specific to the USA and not required in the EU.

For more information on this and to better understand the appropriate HS Code for your products, please visit: https://www.gov.uk/trade-tariff

 

What happens if I don’t have an HS Code for a product?

There is still uncertainty on this, however it’s likely the below issues would occur:

  • Shipment rejection from the carrier
  • Highest import tax applied (over 30%)
  • Added administrative costs
  • Penalty fees
  • Goods seizures
  • Delivery delays

 

Typical Required Data for Carriers (ensure you check with your carrier)

For the best chance of success when delivering to the EU, you should provide your carrier with the information they request. Based on our understanding, we believe the below information in mandatory:

TitleDescription
Senders Name and AddressThe merchant’s company name and registered address
SKUThe unique code associated with the product. The ‘product reference’ in Sellerdeck Desktop
Short description of goodsThe product name or description
QuantityThe amount of product in the shipment
Item weightThe weight of the product. The ‘Weight in KG’ in Sellerdeck Desktop
Value of itemThe product value
CurrencyThe currency
Trade Tariff Code: known as HS code or Commodity CodeTo deliver goods into the EU you will need to have a HS Code (Harmonised System) for each product, which is displayed on the commercial invoice

To learn more about HS codes visit – https://www.gov.uk/trade-tariff

It’s important to get the HS codes correct for all of your products – this will ensure you pay the correct customs tax and don’t pay more than you need to.

Country of Origin (product specific)The Country of Origin of each product. For rules to establish the Country of Origin see: https://www.gov.uk/guidance/rules-of-origin
EORI NumberAn EORI number is required to trade goods with countries outside of the EU, or to trade with the EU if a country is based outside of the EU. From 1 January 2021 you’ll need an EORI number

The new information, previously not required, is:

  • EORI number (company-specific)
  • HS Code (product specific)
  • Country of Origin (product specific)

Our Knowledge Base article tells you which versions of Sellerdeck Desktop will include these fields in the UI and on the commercial invoice and delivery note.

If you have an integration with your carrier, you should speak with your developer to update the integration and export the new fields into the appropriate carrier fields.

Important information on reports

If you have customized your reports (including the commercial invoice and delivery note), these are likely to require additional effort to ensure the customisation remains. You will need to contact your developer to assist with this.

Actions:

  • Amend Shipping and Handling to reflect any new costs for specific zones and to change the VAT to ‘Zero-Rated’
  • Register for EORI number and if required a Licence for exporting certain goods (New patch required – download here)
  • Use your carrier to simplify the payment of tax and duties for you and your customer using the method DDP (Delivered Duty Paid)
  • Add new fields to Sellerdeck Desktop and update the invoice and delivery note
  • Add HS code to each product (New patch required – download here)
  • Add Country of Origin to each product (New patch required – download here)
  • Update delivery details page if appropriate
  • Review returns policy and update returns page

There are many market places, with the two key platforms detailed below. However, most market places will follow the same approach as one of the below two:

Amazon

There is more information from Amazon on their Seller Central page – https://sellercentral.amazon.co.uk/gc/sell-online/brexit

There is a lot of overlap between your own website, Amazon and the requirements.

The key difference is FBA where you have the option to transfer stock between the UK and EU. You should seek advice from Amazon on how to manage this.

eBay

There is more information from eBay on their Brexit page – https://sellercentre.ebay.co.uk/news/brexit

Managing eBay orders will be very similar to your own website and it is likely to be easier to manage if you import orders into your eCommerce platform or back office system so that all orders are fulfilled from the same location and have the same data and follow the same format.

Again, use your carrier for support on delivery to the EU.

Sellerdeck Desktop eBay Extension

The Sellerdeck Desktop eBay Extension itself doesn’t require changes however the configuration may be require change. Users must ensure that any changes made to shipping and VAT in eBay are matched with corresponding changes in Sellerdeck Desktop, and vice versa.

Conclusion

Potentially the information on this page will quickly become obsolete as the Government agrees the way forward on the relationship with the EU.

Please ensure you are aware of recent changes so that the information within this page can be a piece of your overall research.

Sellerdeck wishes you the best through this challenging time and hopes that the EU will continue to be a source of orders and growth.

Summary of Actions

  • Setup Zero-rated VAT. Details on how to apply this in Sellerdeck Desktop can be found in the ‘Advanced Tax Setup’ article in the software main help (Help > Help Topics).
  • Amend Shipping and Handling to reflect any new costs for specific zones and to change the VAT to ‘Zero-Rated’
  • Use your carrier to simplify the payment of tax and duties for you and your customer using the method DDP (Delivered Duty Paid)
  • Register for EORI number and if required a Licence for exporting certain goods (New patch required – download here)
  • Add new fields to Sellerdeck Desktop and update the invoice and delivery note
  • Add HS code to each product (New patch required – download here)
  • Add Country of Origin to each product (New patch required – download here)
  • Update delivery details page if appropriate
  • Review returns policy and update returns page
  • Speak with other platform providers if appropriate

The UK consists of:

  • England
  • Scotland
  • Wales
  • Northern Ireland
  • The waters within 12 nautical miles of their coastlines. Although the Isle of Man has its own VAT authority, sales to the Isle of Man are treated as any other sale within the UK.

The Channel Islands are part of the customs territory of the UK and EU, but are outside the UK and EU, for fiscal (VAT) purposes. Supplies of goods sent to the Channel Islands are regarded as exports for VAT purposes and may be zero-rated.

The following countries and territories are part of the EU fiscal (VAT) area:

  • Austria
  • Belgium
  • Bulgaria
  • Croatia
  • Cyprus, including the British Sovereign Base Areas of Akrotiri and Dhekelia (but excluding the United Nations buffer zone and the part of Cyprus to the north of the buffer zone, where the Republic of Cyprus does not exercise effective control)
  • Czech Republic
  • Denmark, except the Faroe Islands and Greenland
  • Estonia
  • Finland
  • France, including Monaco
  • Germany, except Busingen and the Isle of Heligoland
  • Greece
  • Hungary
  • The Republic of Ireland
  • Italy, except the communes of Livigno and Campione d’Italia and the Italian waters of Lake Lugano
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • The Netherlands
  • Poland
  • Portugal, including the Azores and Madeira
  • Romania
  • Slovakia
  • Spain, including the Balearic Islands but excluding Ceuta and Melilla
  • Slovenia
  • Sweden

The following countries and territories are outside the EU fiscal (VAT) area:

  • The Aland Islands
  • Andorra
  • The Canary Islands
  • The Channel Islands
  • The outermost regions of France (Guadeloupe, French Guiana, Martinique, Mayotte, Réunion and Saint-Martin (French Republic))
  • Gibraltar
  • Mount Athos
  • San Marino
  • The Vatican City
  • all other countries which do not appear in  Countries and territories that are part of the EU fiscal (VAT) area”

Stay informed with the latest ecommerce insights