By Ann Higgins
Many of us are aware that as of 1 January 2022, despite the PM’s statement that they were not part of the Trade and Cooperation Agreement (TCA), the UK government will start to phase in “non-tariff barriers to trade” on imports such as customs duties and phytosanitary inspections [vets inspecting animals to you and me]. They were of course supposed to start on 1st January 2021 but although the general public was urged to be “Brexit-ready” the government failed to heed its own advice and made a “pragmatic decision” to delay introduction of the new import regime not once but twice. Given what the imposition of similar regulations has already done to UK exports to the EU, we have to wonder how imports will be affected.
However the point of this little piece is not, tempting though it is, to have a general moan about the self-inflicted harm being done to our economy in the name of the great god Brexit, but to draw your attention to a far less well publicised change that has already taken place and which has already started to affect our ability to import, i.e. the requirement by the UK government that all importers, worldwide, who sell directly to the public, must register for UK VAT. Previously, goods valued at under £135 and those from the EU were exempt with the VAT on non-EU goods being levied at the point of import. But now all goods under £135 have VAT levied at the point of sale thus requiring all EU importers wishing to sell direct to customers here to register. Even “low value consignment relief” for goods under £15 has been abolished so the something which previously cost £14.99 now costs £17.98. The only exception is if you buy through a “marketplace” which will then account for VAT internally.
But reluctance by EU traders to engage with HMRC over VAT is only one problem that importers are encountering. The “rules of origin” regs have already bitten, catching goods which are not sufficiently manufactured in the EU, e.g. the now notorious Percy Pig sweets sold by M&S, increasing the duty paid by UK importers by £600 million in the first six months of 2021, according to the Guardian. And this is before the “non-tariff trade barriers” which the PM stated would not apply start to bite on UK firms.
But then we know how he feels about business, don’t we?
Featured image: Paul Teysen on Unsplash