Buying and Selling in the EU As A UK SME. Everything you need to know

Foreign exchange 23 September 2021
Buying and Selling in the EU As A UK SME. Everything you need to know

It’s midnight on January 1st 2021. Fireworks are lighting up the sky and bottles of prosecco are being popped across the land. As people glugged their Italian fizz, the UK’s relationship with the European Union was to be changed forever. 

After 5 years of negotiations, speculation and doomsday preparations; British businesses were about to face their biggest regulatory challenge in 50 years. 

As a member of the European Union the UK was part of the European Single Market (also known as the Common Market). The purpose of the Common Market is to guarantee the free movement of goods, capital, services, and people between member states. 

This meant that businesses could trade freely across the union with as little red tape as possible. A new The EU-UK Trade and Cooperation Agreement was signed in In December 2020, provisionally applied on 1 January 2021 and came into full force on 1 May 2021. 

Here’s our guide to everything you need to know about trading with the EU as a UK SME or sole trader.

Register for an EORI Number

An European Union Registration and Identification Number (EORI) is a unique ID code issued to businesses that want to import or export goods into or out of the EU. It is used by customs and other authorities to monitor and track shipments coming in and out of the European Union.

If you don’t have a valid UK EORI number you cannot legally import and export physical goods from the EU. An EORI number isn’t required for physical goods shipped between Northern Ireland and the Republic of Ireland If your business trades in digital goods or services an EORI number isn’t required at all. 

 

How to register for a UK EORI number

●  Visit the EORI information page on the UK government website

●  Complete the correct online form for your needs, based on your location and business type

●  You should receive your UK EORI number by email within a week

 

When to use your EORI number

You must include your UK EORI number when completing any required customs documentation. If you use a dedicated courier or shipping service you must provide them with your UK EORI number, if they do not handle the process for you. 

 

Importing and Exporting Physical Goods

Trade in goods between the EU and UK is not subject to any tariffs or quotas but products must be certified as compliance with agreed rules of origin. However, as a result of the UK leaving the EU customs area there are import and export tax considerations that businesses must now consider. The amount you may be required to pay depends on the type of goods you import and export. 

 

Importing and Exporting Digital Goods and Services

Under the EU-UK Trade and Cooperation Agreement allows for the ‘free movement’ of cross-border data transfers across the internet. However the market access rule for the sale of digital goods has changed. UK online businesses can longer use the UK’s VAT Mini One Stop Shop (MOSS) service to declare sales and pay VAT due in EU member states.

 

Effective as of 1 January 2021, UK business must register register for either:

●  VAT MOSS in any EU member state or

●  VAT in each EU member state where digital services are sold

 

What does this mean for customers?

Post-brexit online shoppers may see customs duties, import VAT and courier fees added to the sale price of items ordered from the EU (and vice versa). How much a customer may be charged depends on the total value, origin and company from which goods are purchased. 

Over under £135 won't be liable for any additional costs, except for any postage & packaging as standard. Orders over £135 may incur one or more of the following fees:

●  Customs & import duties: between 0-25% depending on the type and origin of an item

●  Import VAT: paid on the total value of an item at the UK import VAT rate of 20%

●  Courier handling fees: if applicable these are paid directly to the delivery firm and can vary from supplier to supplier

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If you buy and sell overseas – or are thinking of doing so – choosing a multi-currency account with Safenetpay is the smartest decision you can make. you’ll receive your own UK account number and sort code as well as an IBAN, and you can handle international transactions via the SWIFT network. 

Safenetpay enables you to accept all major credit cards, you can make payments in over 150 currencies, and you benefit from exchange rates that are often four times cheaper than high street banks. You are also set up for alternative payment methods such as digital wallets, including Apple Pay, Google Pay, PayPal, MasterPass, and Amazon Pay.

 

Say goodbye to fragmented finances with Safenetpay

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