Sending and receiving parcels isn't quite as easy as it used to be...
Sending and receiving parcels isn’t quite as easy as it used to be…

 

A week or so after we officially left the EU, I wrote a blog on the ScooterNova magazine website outlining some of the changes relating to the buying and selling of scooter parts within the EU that would take place due to Brexit. Almost two months in things haven’t yet settled down completely, but as times goes on so a little more information has come to light.

 

This isn’t a pro or anti-Brexit blog by the way, so please do leave your politics in the school playground. Preferably in the dark corner where that spotty kid used to wee when he thought no one else was looking. Whether you voted for or against it (Brexit I mean, not the spotty kid’s DIY urinal) it has happened and even if things do change, it ain’t going to happen overnight.

 

Myth Busting

 

My original ScooterNova blog was in response to a few misleading posts elsewhere, suggesting that the new rules that came into effect from 1 January 2021 would mean discounted parts for British customers, tax-free shopping and more. The fact is however that when we talk about the taxes we as British consumers and businesses pay, we are also talking about the British Government who collect them. And I for one can’t think of a time when the British Government said to us, “hey folks, don’t worry about paying us any taxes, we don’t want your money.”

 

So the first myth to put to bed is that various European governments are punishing the UK for leaving the EU and the European Single Market. That is not the case. Or if they are it is not by charging us extra taxes. What politicians may or may not do in the privacy of their own homes between consenting adults of course is up to them…

 

ScooterNova magazine and SLUK are both proud to carry adverts that are based on ‘quality’ over ‘quantity’ and that includes scooter businesses from both the UK and mainland Europe. And for many years now scooterists and scooter shops have been happily trading across the English Channel in a fairly simple manner. A Malossi kit comes this way from Italy maybe, and a hand-built exhaust goes back from Scorpion for instance. These things can still happen, but not as simply as pre-Brexit times it seems…

 

Local Taxes

 

Without going into the complexities of tax, the benefit the UK has now lost from leaving the European trading union is that in the EU the member countries all have an agreement to collect VAT at source. Value Added Tax (VAT) is a consumption tax that is applied to nearly all goods and services that are bought and sold for use or consumption. But VAT isn’t charged on exports of goods to countries outside of the EU. In these cases, VAT is charged and due in the country of import. The seller doesn’t need to declare any VAT as an exporter but must provide documented proof that they have exported the goods, things like a copy of an invoice and transportation documents. By now you should be realising that extra paperwork is involved on all sides…

 

From the UK point of view, until 1 January 2021, it was only countries outside of the EU for which these rules about VAT applied. Anyone who has bought or sold goods to or from America, Australia, Japan, NZ, India, Vietnam, Canada etc may well be familiar with the procedure. For example, all individual copies of ScooterNova magazine we send via Royal Mail over the counter at our local Post Office are done so with a CN22 customs label attached, which covers goods up to the value of £270 (over that amount you need a CN23 form). On the CN22 you must declare who is sending the contents, whether they are a gift, documents, sale of goods, commercial sample, returned goods or describe any other situation. You also need to describe each individual item inside, their quality, weight and value. Again for ScooterNova we have to list separately the magazines, T-shirts, badges, etc we have sold to the customer.

 

When the parcel arrives at the destination country it is then down to the local laws as to what, if any, tax and import duty is applied, which may vary depending on the contents and value. Similarly, when goods despatched to the UK get here, it is the British Government’s HMRC which sets the rules as to what the receiver must pay regarding VAT, plus any import/customs duty for buying and importing goods.

 

Will British industry clean up?
Will British industry clean up?
Maybe not...
Maybe not…

 

Mainland Great Britain

 

However, since Brexit ‘got done’, as far as mainland Great Britain is concerned the EU is now to be treated the same as the USA, Australia and everywhere else, with all goods imported and exported subject to the same rules. I say mainland Great Britain because the poor souls in Northern Ireland are currently out on a limb with an ‘Irish Sea Border’ somewhere. Literally in deep water between us and them that sort of aligns them with the European Single Market, while also remaining part of the UK’s customs territory. Utter chaos and confusion as far as anyone I know over there is concerned, with many companies refusing to ship goods to NI as a result of the extra costs, paperwork and hassle involved. Still, the Brexit referendum was only in 2016 so it’s not as if the Government has had four years to sort things out…

 

So whether you are a private buyer or a trader, products you buy in Europe are now likely to arrive with strings attached. Or rather paperwork. And bills. HMRC will charge VAT, and a Customs/Import Duty is also being applied in many cases. To make sure they get their money, the British Government are tasking the courier companies to collect this for them, which as they are not getting paid for this extra work will pass the cost on to you, the recipient, for it.

 

To be fair this has always been the case with goods imported from outside of Europe, but now of course it applies all over.

 

Which VAT rate?

 

VAT is currently 20% in the UK while in Germany it’s 19%, Spain 21% and Italy 22% so you may be paying a little more or less in VAT than before, depending on where you shop, but only by a percent or two.

 

Shop Local

 

For the individual customer, a solution to the increased cost and complexities is to buy whatever you desire within the UK (or your home country). Popular European scooter shops such as SIP, Scooter Centre Koln, Rimini Lambretta Centre and Casa Lambretta, all have dealers within the UK selling their wares – the likes of SIP/Scooter Center also stock parts made in the UK. Brands such as BGM, Casa Performance, LTH, Malossi, Polini, Pinasco, and many, many more can also be found in UK scooter shops.

 

If you’re in the EU, you can buy all the SLUK Plastics direct from SIP – a good way to save shipping costs if you’re in Europe.

 

You’ll find adverts for those we use ourselves in the pages of ScooterNova magazine and similarly on SLUK here. With the recent Covid pandemic affecting many of us, they’ll all be pleased to see you pay them a visit and spend some money across the counter, when restrictions allow of course. However, don’t forget that the traders themselves are also subject to similar customs/import duty, VAT and handling fees, as well as their usual costs for shipping.

 

Extra costs? Pass it on…

 

One British scooter shop owner showed me a recent post-Brexit invoice for scooter parts from Europe valued at around £840 that had the VAT added to the bill at this end, plus around £33 ‘Duty’ and a handling fee of £11. As another trader told me when discussing what effect Brexit would have, the aforementioned invoice would add around £5.50 to the trade price of an exhaust to them.

Remember too that the extra cost is what the UK government are adding, it is nothing to do with the EU or the European shop that sold those parts, whether retail or trade. As far as the European Single Market is concerned, Great Britain is now treated as if they were trading with the USA, Australia, or Japan for example, except of course it’s cheaper to post things to us than half way around the world.

 

Also worth noting is that some parcels are being delivered by a courier who will take immediate payment for duties, while others are being left without charge and the bill being sent to the recipient later. Others may of course slip under the radar, but we wouldn’t bank on that being anything more than an exception to the rules. Count yourself lucky if you’re one of them…

One recent email from a supplier warning of delays...
One recent email from a supplier warning of delays…

 

How long?

 

This brings us to the next subject many are currently encountering, that of delayed parcels arriving from Europe. Some are getting through in normal time, while others it seems have been delayed by anything from days to weeks. Unlike the additional costs associated with importing goods from Europe, however, it is hoped that any Brexit-related delays won’t last for long. The cause is likely to be one of three things; the seller being unsure of the paperwork now required by local export regulations and also HMRC for goods to enter the UK; we have heard of parcels being rejected by the courier.

 

There is also a bottleneck of parcels in various European countries now requiring paperwork to be checked before leaving, and a bottleneck of parcels in the UK requiring paperwork checks and bills to be issued that has overwhelmed officials at either end. One German scooter shop told of a local parcel depot that before Christmas 2019 had around 750,000 parcels to despatch. However pre-Christmas 2020, the rush to beat new Brexit regulations saw this load double to 1.5 million parcels. And that was just one courier company.

 

eu

 

Declarations

 

In my original blog on ScooterNova the research I did then suggested that goods worth up to £135 could be purchased overseas with VAT paid at source, while those with a higher value would be purchased tax-free and all duties and charges subsequently paid on import. If you’re in Northern Ireland then apparently the rules apply to goods both outside of the UK and the EU. Here is some source material to have a read of.

 

One trader told me one of his suppliers now has a minimum order charge of £136, meaning that all VAT is the responsibility of the buyer rather than the seller. Fair enough. I’m sure overseas businesses dislike doing their own VAT paperwork, let alone extra for HMRC.

 

Be careful not to under-declare

 

Import Duty and VAT is item and value specific, which is why extra paperwork and declaration forms are required so the Government can calculate what they are going to charge you. While it shouldn’t take a genius to realise that HMRC won’t take kindly to anyone they discover making false claims, it should also be pointed out that if a parcel containing a £7k engine goes missing or gets damaged and the accompanying paperwork states it is only worth £134, don’t go expecting an insurance claim to pay out any more than that.

 

Another trader recently received a package that was followed a few days later by a VAT invoice with no import duty or handling fee. His VAT invoice was to be paid direct to HMRC and not via the courier company.

 

Value, errr £135...
Value, errr £135…

 

What’s an EORI?

 

A London scooter shop owner told me he thinks making sure that his business’s EORI number* is correctly quoted in the right places should not only make things flow more smoothly but may potentially save you handling fees too. He also told me that, after discussions with his accountant, he can postpone his VAT accounting and therefore not have to pay any handling fees to couriers. The gov.uk website states; “Businesses will be able to use postponed VAT accounting to account for import VAT on their VAT return for goods imported from anywhere in the world. This means the business will be able to declare and recover import VAT on the same VAT return, rather than having to pay it upfront and recover it later, subject to normal VAT recovery rules.” For more details visit the website here.

 

Handling fees

 

Apparently, DHL and UPS are among couriers who are charging handling fees at the time of writing. However speaking with Dean Orton out in Italy the other day, he told me that at the moment Rimini Lambretta Centre are using FedEx to ship goods to the UK, and they, in turn, have told RLC that they won’t charge a handling fee upon delivery to the recipient for any extra taxes that may or may not be applicable. However, as with much of this messy situation, things could change at any moment.

 

*“an ‘Economic Operators Registration and Identification’ number is now required by businesses and people wishing to trade with the EU. The number is to be used in all customs procedures when exchanging information.”

 

Returning goods or overcharged?

If you’re returning goods to Europe, or think you’ve been charged too much VAT you can ask for a refund by filling in a form online.

 

  • If the goods were delivered by Royal Mail/Parcelforce use BOR 286
  • If a freight company or courier delivered them use form C285
SLUK Plastics, made in England - used worldwide
SLUK Plastics, made in England – used worldwide

Made in Great Britain

 

At ScooterNova magazine we’re proud to support local businesses. The magazine itself is produced in Wales, our postcards and leaflets produced in Essex, and after some research we’ve managed to source some small, family businesses to produce merchandise like our magazine storage cases (Lancs) and leather key holders (West Midlands) too. Check out our shop to browse the range of products available. SLUK’s own plastic products are also proudly produced in the UK (Leicestershire to be precise) from recycled materials sourced in the UK. Buy yourself a SLUK Guard, screen or mudflap and you’re not only extending the life of your scooter, (or enhancing its appearance) but supporting British industry too.

 

In theory, this is a potential solution to the hassles of importing stuff from overseas. If only our manufacturing ability hadn’t been gradually eroded over decades of neglect and consumer demand for cheap mass-produced products from places like China, where the living wage is far below that of what we would tolerate here in the UK.

 

British industry

 

That’s not to say we can’t make things here anymore of course, although while our ScooterNova T-shirts are proudly printed by a scooterist-owned business in Manchester (Crusader Promotions) sourcing suitable British-made garments to print on to is proving a long, drawn-out challenge. We’ll get there in the end though…

 

In the world of classic scooter parts, PM Tuning are probably one of the longest established exhaust manufacturers in existence, manufactured in Lancashire. Granturismo proudly produce their GT kits in the UK, Hagon and Protech both manufacture suspension units in the UK as well, Allstyles Scooters have numerous, small but necessary engine components made locally along the south coast, and the new Ex-Box exhausts by Ron Moss of Supertune fame are also being manufactured here in Blighty. In fact, I’ve recently fitted one to my TS1 Lambretta and rate it highly.

A pallet of SLUK Plastics heading to SIP - export made easier because the materials originate in the UK
A pallet of SLUK Plastics heading to SIP – export made easier because the materials originate in the UK

Rules of origin

 

There are plenty more examples too, although Brexit may affect some of these products depending on the source of their raw materials or extra pieces. The ‘Rules of Origin’ mean that exporting anything to the EU from the UK has to have its originating status described. It could be either, “a good that is wholly obtained or produced in a single country” or “a good that has been ‘substantially transformed’ – that is, produced with materials from other countries or partially processed elsewhere but has had substantial processing and value added.”

 

So if you produce a cylinder in the UK using aluminium from China and sell it with a piston and rings imported from Japan, this looks to be a different kettle of fish to something produced entirely from metals mined in the UK for example.

 

Then you have the branded products which are produced entirely overseas, imported into the UK then sold on to the trade around Europe. Confused? Yep, you’re not the only one.

 

"Can you do me a VAT receipt and paperwork for these Mario?"
“Can you do me a VAT receipt and paperwork for these Mario?”

 

Scooter Imports

 

So let’s go back to importing from Europe and what happens now regarding any classic scooters still in Italy and Spain that dealers may still want to bring to the UK? In the old days it was easy to drive over, buy a scooter from ‘Mario’ or whoever you met in a bar there, load it into your van and as long as you avoided Switzerland on the way home, et voila. That’s how I got my Li Series One back in the 1990s. For traders bringing them back by the truckload it was a similar situation.

 

In recent years registering an imported scooter in the UK became marginally trickier since DVLA declared a NOVA form needed to be completed, but in an equally lazy bureaucratic way that simply added a layer of paperwork and simultaneously did away with the ability to easily register a UK barn-find scooter. Most vehicles became an import from then on. But since 1 January 2021, that appears to have changed too.

 

Speaking to Marco at Scooter Emporium post-Brexit, he explained that things are going to be a little tougher and more expensive from now on. While the Emporium and other traders such as Swiss Tony’s do collect receipts for scooters they purchase at Italian parts fairs such as Imola, gone are the days when a handwritten piece of paper from ‘Mario’ in ‘via Stazione, Milano’ was enough. “We’ve used hauliers and freight-forwarders for years now, as well as bringing scooters back in our van,” Marco told me. “But now hauliers or a freight-forwarding company will only move bikes from a VAT registered seller, not from private sellers. You will also need an EORI number.”

 

Carl at Swiss Tony’s added, “Bikes will basically have to go through a freight forwarder, listing chassis numbers. Customs will check chassis numbers and issue you with a number that will generate on their system the paperwork required to register it, and the duty they will collect from you for it. A scooter needs to be customs cleared before it leaves the country where you bought it, which technically requires the seller to do this for you.”

 

Since 1st January 2021 the way to register an imported vehicle from Europe has changed too. A customs clearance number will be required to get it sorted here in the UK. That paperwork requires the information that originated with the freight-forwarding company when they clear it for export using a digital clearance number. “It’s not that you can’t do it,” Marco told me, “It’s just that you need all the correct paperwork. And how often at a parts fair do you get a full receipt, traceable, for every scooter you buy, complete with logbook and all documentation, a photocopy of national id card etc. and the owner also goes to the officials to say you are exporting the scooter? Most of them just want cash in hand. And if you’re missing anything, how do you then go and get that missing piece from the seller? Hauliers won’t get involved due to the hassle of not having all the paperwork, which is why they only want scooters with all the paperwork in order or not at all. And if you arrive at Dover and are pulled in with scooters in the back of your car or van, you will be asked for paperwork proving it has officially been exported from Italy. And that’s if the French don’t rip you apart before you even get to the ferry port. Or at the port in Calais at the Eurotunnel terminal. And they do like to impound things in France. Already we are hearing people would rather sell scooters to their fellow Europeans as that involves no paperwork or hassle because they are not exporting the scooter.”

 

The cost of the paperwork and freight forwarding will of course be added to the final retail price of the scooter. There may be VAT at 5% added too, but there is still uncertainty about that. To be fair, Marco told me it’s taken until about a week ago before they managed to learn what the commodity code was for importing classic scooters. It really is a complex situation going on out there…

 

Vanning it abroad?

 

Apparently, there may also be declaration related paperwork required if you take a scooter over to Europe in a van to ride on holiday, (or in a back up van to a Euro rally) for example, regarding temporary import/export, so watch out for that one as well.

What Next?

 

As Dean put it,

Scooterists in the UK will have paid VAT on parts pre-Brexit, you just paid it in a different way.”

Things will cost us here in the UK a little more, but the world won’t grind to a halt. A lot of the restoration related parts we use on classics come from outside the UK so we will continue to buy them from abroad, either directly or via your local ‘bricks & mortar’ scooter shops. They just might cost you a little more now – or take a bit longer to arrive, thanks to Brexit. We all have fingers crossed however that as time goes on, the process will become smoother as people get used to the way things are going to work from now on. We just need a little patience…

Andy

 

Thanks to Marcus Broix for additional help with this article

 

Updates

 

As the Brexit situation is still pretty new and things are still evolving we’ll update and correct any information in this article as things change. 

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ScooterLab & ScooterNova

ScooterNova is an independent scooter magazine published and printed in the UK by scooterists for scooterists. Edition 24 (March/April 2021) is available now from all good scooter shops and also from us here at Sluk in our shop where you can also subscribe to ScooterNova magazine by clicking this link.

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