Negotiations on a trade agreement between the European Union and the United Kingdom have once again reached an impasse. On Friday evening, EU negotiator Barnier and his British counterpart took a break, after which negotiations continued on Sunday. The conditions for a trade deal were “not fulfilled”. The current transition period applies up to and including 31 December 2020. During that period, the way of purchasing online in a British web shop will remain the same, says Emerce.
No new trade agreement
If there is no new trade agreement by January 1, 2021, the rules will change. Ordering on a British web shop then becomes the same as when ordering something outside the EU, such as in the United States or China. In that case, consumers in European Union must pay VAT for products that cost €22 or more. Consumers also have to pay import duties if the purchase value is higher than €150.
E-commerce companies should assume the worst
For consumers a no deal probably does not have much impact. Many years ago it was still attractive to order books from the British Amazon, now almost everything is available through other channels.
It becomes more complicated for e-commerce companies that also sell services or products in the UK. It was advised for e-commerce companies to assume the worst and prepare for a future in which the UK is no longer in the customs union. In the latter case, doing business with the UK becomes comparable to doing business in Australia, a “third country”.
In addition, waiting times at the border can become longer. It may therefore just be that e-commerce companies can no longer deliver their products within 24 hours. Furthermore, product requirements may also change after Brexit. For example, the general and specific EU product requirements, such as CE marketing, may no longer apply in the United Kingdom after Brexit. Moreover, payments to and from the UK may be slower and at higher rates, as many European rules are no longer valid for these payments. Web shops can no longer use a payment institution that only has a British license to process payments. Trade costs for exporting and importing products to the UK will increase due to import tariffs, border controls and customs procedures.