Our recent webinar on the topic of problems associated with shipping from the UK to Europe after Brexit attracted more questions than we’ve ever received before. This should come as no surprise since the topic is so important for so many eCommerce companies based in the UK that find themselves at a competitive disadvantage because of various obstacles in their way. If you haven’t seen it already, be sure to take a look and listen to the insights provided by the hosts.
In this post, we would like to share what was discussed during the Q&A session at the end of the webinar as a separate, quick-check resource for anyone interested in the subject. This is important information for common problems that we know many eCommerce companies in the UK struggle with.
The information here can help anyone trying to answer the challenges faced by UK-based online retailers — longer shipping times, higher costs and more difficulty in meeting customer expectations.
If you’re looking for answers to anything that isn’t covered here, be sure to reach out to our Sales team and they will be glad to help.
Here are the questions and answers from our webinar on the topic of how a fulfillment partner can streamline shipping from the UK to customers in Europe.
1. What is the standard VAT rate in Poland?
The standard VAT rate in Poland is 23%, so in fact it relatively high compared to other EU countries. However, please note that when selling goods to B2C clients from other EU countries you should apply the VAT rate of the country of destination of goods. It does not matter that the goods are stored in Poland.
2. Does the DE-Minimis come into effect at 150 euro and anything less than that is not subject to Duties & VAT?
Parcels below 150 EUR are exempted from import duty. However they are still subject to VAT taxation. The threshold of 150 EUR refers also to possibility of using the VAT iOSS procedure. VAT iOSS enables suppliers to settle the import VAT on behalf of the client in one joint tax statement. However, please note that even if using the iOSS scheme the parcels will be subject to custom checks, which delays the parcel’s delivery.
3. I sell books which are manufactured in continental Europe. They are shipped to me from the manufacturer and I distribute them from here in the UK. When I ship them from the UK to the EU to my customers, do they still need to pay import tax as if the books are coming from the UK or should there be some exemption because the products originated in the EU?
Unfortunately such transaction would be subject to import VAT regardless of the fact that the goods originated in the EU. However is some cases the exemption from the import duty might be applied– e.g. for parcels below 150 EUR.
4. We have special packing materials and methods we use with our shipments. Do you offer customised services for things like that?
Yes. We work with many clients that use custom packing materials and want their items prepared in a particular way as part of their customer experience. We are happy to accommodate this kind of practice and during the onboarding process with new clients we learn the details of any specific methods they want to be included in the way we pack and ship their items.
5. We are VAT exempt in the UK, with our turnover being less than the threshold of 85K GBP. How can we proceed in stocking in the EU without a valid VAT number?
You will need to apply for VAT number in EU (e.g. Poland – if the goods are stored there). It does not matter that you benefit from VAT exemption in UK.
6. I sell routers imported from continental Europe to the UK and EU, so double tax is a real obstacle for me - off for EU exports again from the UK. Please advise me on this.
The is the exemption from the custom duties in case of goods originated in EU exported to UK. You can also consider using import VAT deferment schemes. You can contact our partner – Taxology – for more details.
7. We have a UK Shopify Store - Can Omnipack integrate with the current site using different warehouse locations or does there need to be a separate EU Shopify site?
Yes, we can integrate with your UK shopify store from a technical aspect, but we recommend having a Shopify site within the EU. It's much easier for you from the logistics aspect. It’s just easier to manage stock and divide it into one for EU orders and one within the UK.
8. What is your cut-off time at Omnipack?
It depends on the specific direction, but usually we do have late hours. Couriers can pick up orders even after 8 p.m. For more details please contact us.
9. Do you handle returns?
Yes, we do offer return processing as a service. This takes a great burden off retailers since this can be a time-consuming process. We are fully equipped for handling returns and returning items to inventory when possible. We even have facilities for restoring clothing items to an ideal state.
Working out the details of how returns are processed and what should be done with them is something that we cover with clients during the onboarding process.
10. Do you offer any environmentally-friendly packing options at Omnipack?
Yes, we do. We understand that an increasing number of consumers expect to have packing options that involve less materials, recyclable materials and generally less environmental impact.
All of our boxes are 100% produced from recycled material and are themselves recyclable. Flap boxes are available in 6 sizes and shaped cardboard boxes are available in 3 sizes in order to optimize the number of boxes we need to order and reduce waste.
Die-cut cartons (used in the fashion industry) are adapted to be used for returns. They have a second adhesive strip, so any customer who returns products can use the same carton in which the order came and does not need to have adhesive tape to seal them.
The number of boxes and amount of fillers is carefully tracked to ensure their efficient use and avoid waste. We scan each product that is packed, which helps us to use the appropriate amount of packing materials and ensure that everything gets exactly what it needs to provide full protection and the best customer experience without ordering and using too much of it.
11. What kind of engine sale software (shop) from the UK you can recommend with automatically translating products to European languages, integrating with EU marketplaces (like Allegro) and with logistics processes?
We recommend Shopify - it’s simple and works well for crossborder sales.
12. Can you advise companies with no experience on how to best set up their operations for the European market?
Absolutely. We use the experience gained from working with many clients involved in trans-national shipping to advise all of our clients on the best way to optimize their legal and financial positions. It’s part of the range of services we provide to facilitate cross-border shipping throughout Europe.
13. What happens with a startup which is not subject to VAT charges in the country of origin (UK)?
The VAT exemption in UK has no impact on VAT taxation in EU. Hence, if you store the goods in Poland you will need to obtain a Polish VAT number and apply VAT to EU customers’ sales.
14. What is the base price on which VAT is calculated? How do you raise the invoice?
The rules of raising invoicing in EU are very similar to those in the UK. You should also remember that the VAT rate depends on the country of destination of goods. For the calculation of the base price for VAT please refer to the following example (the price of goods is €12.00 and the VAT rate amounts to 20%):
€ 12.00 (listing price) / (1 + 0.20) = € 10.00
15. You said that "Online sellers, including online marketplaces/platforms can register in one EU Member State and this is valid for the declaration and payment of VAT on all distance sales of goods and cross-border supplies of services to customers within the EU." So you choose one country, i.e. Poland, and always pays 23% VAT — it does not depend on the destination of the customer. Can you please clarify?
In case of OSS you make the registration and VAT compliance in one EU country – e.g. Poland. However, the VAT rates depends on the country of destination of goods. So if you sell the goods to Germany – you should apply German VAT rate. The tax will be paid to the Polish tax office which subsequently transfer the money to German authorities. The OSS scheme was introduced to simplify VAT reporting for e-commerce sale (no need to be VAT registered in all EU countries).
16. Can Omnipack provide help in getting VAT in Poland?
Yes. You contact our partner - Taxology – for the assistance.
Problems with shipping to Europe? Omnipack can help!
If you’re dealing with your own post-Brexit challenges, Ominpack can help. From faster shipping times to cost savings to improved customer satisfaction, you have a lot to gain from working with a logistics partner that can streamline your shipping operations. Get in touch with us today and let’s talk about how solutions from Omnipack can better connect you with millions of consumers in the European market.