Fighting 15s and Brexit Day

Brexit Day – or B-day*, as I prefer to call it – will from a retailer’s point of view very soon be upon us. I am already looking beyond Christmas for the arrival of new stock, and it is therefore time to think about the implications of B-day on the running of Fighting 15s. If you run a small VAT-registered mail-order business with continental EU customers, then at some point you’re going to have to do some similar thinking. Uniquely, small non-VAT-registered businesses are not affected.

Obviously, with the recent purchase of Gladiator Miniatures, Fighting 15s plans to carry on trading: Fighting 15s will continue selling to the UK, what’s left of the EU, and beyond. Fighting 15s will continue importing AB and Eureka Miniatures. Just so those topics are got out of the way first.

B-day properly is 29 March 2019. However, it may be that negotiations mean that customs regulations don’t change immediately because there may be a period of transition. So, I’m going to instead define B-day as being the date that customs regulations actually change: that may be 29 March 2019, or it may be some date further in the future.

There are only two outcomes on B-day, whatever the fine details of discussions with the EU and whatever the final deal struck: the UK remains in the customs union or it does not.

In the currently unlikely event that B-day arrives and the UK is still in the EU customs union, then good news: nothing is going to change. VAT arrangements and import duties stay as they are and Fighting 15s carries on as at present.

If the UK drops out of the customs union under the no-deal option, or has a compromise deal where cross-border taxes are handled as they are for Norway, Switzerland or in the Canada deal, then Fighting 15s will have to shut temporarily around the B-day period and estimates that period of closure will begin about two weeks before B-day and end about two weeks afterwards.

The reason for this closure is simple: the changing tax regime may catch Fighting 15s’ continental EU customers with a double tax whammy. Orders placed by continental EU customers prior to B-day will be charged VAT; orders placed after B-day will not. It is conceivable, therefore, that an order is placed with VAT charged, but not dispatched until after B-day, when it risks being charged import tax again, along with handling fees by the delivery company. The only way to avoid this is to close before B-day to be able to clear any orders to continental EU customers and ensure that these orders are dispatched in plenty of time before B-day. Fighting 15s will then be able to focus on UK orders, and work on changes to the online shop.

Note that while the UK is a member of the EU, it is Fighting 15s’ understanding that UK online retailers have to trade without prejudice to all customers in all EU countries: it is not legal to, say, shut off all of the EU except the UK – either a retailer is open to all or shut to all.

As I said at the start, non-VAT-registered businesses are not affected. They don’t charge tax to begin with: the only change is that after B-day a parcel from them will be taxed in the destination country, making their goods typically 20% more expensive (plus that handling charge) to continental EU customers.

If B-day – again, I repeat, from a customs point of view – is the earliest possible date of 29 March 2019, then Fighting 15s expects to be closed from mid-March to mid-April 2019, and it will not be possible for anyone to order during that period: the online shop will be put into holiday mode, and with regret it will not be possible to accept orders by phone, email or post because the online shop is used to administer such orders. I repeat that in reality B-day will probably happen at the end of whatever transition period is agreed.

Shortly after B-day, Fighting 15s will initially reopen online to UK and non-EU customers (such as those in the USA, Canada and Russia). Fighting 15s will reopen to EU customers once it becomes absolutely clear what the obligations are with regards to customs and duty and once the online shop is set up to run properly under the new customs and tax requirements. EU customers ordering from Fighting 15s after this point will have VAT deducted in the shop, and will be liable for VAT on import as well as any handling fee charged by the delivery company.

Fighting 15s therefore recommends that anyone with figure requirements for a major project in the new year, or in particular for Salute 2019 on 6 April, gets organised and orders early.

Please stay tuned to this article, as I will update it to reflect actual dates and the exact nature of the UK’s departure from the EU, and based on whether the intended transition period happens as expected or is extended.

Ian, Fighting 15s

* Here I prefer to fondly remember that Crocodile Dundee succinctly defined a bidet as something you wash your bum with.

PS. For the record, I voted Remain. However, I accept that daft though I think their decision is, a majority of those who voted wanted to leave the EU. I don’t believe the terms of that exit were made clear, that a lot of lies were told, but I have to live with what is decided because I believe in democracy. As we head to B-day, I simply point out more of the unforeseen consequences, which of course remain irrelevant to anyone who wants Brexit at any cost.

 

 

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