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What No Deal Brexit with WTO rules would look like

By Chris Dawson January 17, 2019 - 10:00 am

The historic defeat of the Government’s Brexit bill must not lead to a No Deal Brexit with World Trade Organisation (WTO) rules, says international parcel delivery expert ParcelHero. ParcelHero are urging politicians of all sides to join the battle against a default No Deal Brexit with WTO rules; which would result in new tariffs and red tape on shipments at European Union (EU) borders.

The defeat of the Government’s Brexit proposals by 230 votes could lead to an automatic No Deal Brexit with WTO rules if no other solution is reached. This would result in the imposition of disastrous tariffs and delays on goods at EU borders, under WTO rules.

“Since the original Brexit vote we have learned from the National Institute of Economic and Social Research that Brexit will cost £100bn a year by 2030, largely due to new tariffs and duties on UK parcels and goods entering the EU, and red tape at Britain’s borders disrupting just-in-time manufacturing by delaying the delivery of internationally sourced components”
– David Jinks, Head of Consumer Research, ParcelHero

To put into perspective the situation that would face online retailers and consumers, I’ve just received an invoice for Duty and VAT for an import from the States that was delivered on Christmas Eve. Along with the Duty and VAT (which in a no deal Brexit would also be applied to imports from the EU) is a ‘Disbursement Fee’ of £11.50. That’s the charge to simply cover the cost of collecting the taxes due and sending them to the government. Imagine if every time a UK consumer purchased from the EU they had to pay an additional £11.50 and similarly consumers in the EU were hit with a similar charge (plus of course the Duty and VAT) for every item you sold to Europe.

“Last August we also saw the Government issue technical papers saying people and businesses shipping items to the EU should ‘Engage the services of a customs broker, freight forwarder or logistics provider to help, or alternatively secure the appropriate software and authorisations.’ We said at the time this advice is reminiscent of Government duck and cover advice to ‘Use tables if they are large enough to provide you all with shelter’ from 1980’s Protect and Survive government booklet.”
– David Jinks, Head of Consumer Research, ParcelHero

A No Deal Brexit with WTO rules red tape alone would see online merchants having to grapple with 19,000 individual tariff codes for every product sold to the EU – of course this already takes place when selling to the rest of the world but the duty and VAT collection systems for UK to EU and EU to UK trade simply aren’t currently in place. Couriers aren’t ready and neither are online merchants. Consumers will in all likelihood simply stop buying cross border as soon as they start receiving tax invoices with £11.50 tagged on as a disbursement cost for everything they purchase.

  • Mark
    1 month ago

    I watched an online video put up by a very very rich UK businessman who is a strong Brexit supporter who is very happy to leave with no deal and it went as follows.

    we import double what we export to the EU so we will be much better off in industry if we do just one simple thing implement a system that would run as follows.

    2 x £100 items imported from the EU 10% tarrif now on shop shelves the item is £110.
    Consumers think “Wow that’s dear” and buy a British version so EU company hurts and our government has collected £20.

    1 item exported to the EU was £100 but our government uses £10 of the £20 it collected and gives it to the UK exporter to make the price at £90. The EU then slap on the 10% tarrif and its now £99 to the EU buyer who says “Wow the UK item is actually cheaper following Brexit” and buys British sales are unaffected or actually higher. Plus our government has still got the £10 collected on one of the 2 items imported.

    The strange thing is as he said it is so simple and he has shown it in its raw basic state but the principle is there to take advantage of on a 2 to 1 import system that we currently have with the EU. So make them sit up and think.

    So we could actually be operating on a Chinese style export system.

    They sell overseas and get subsidised shipping by their government and our royal mail in a twist of 3rd world claims.
    They then submit to their government that they sold an item to overseas and get the full cost of shipping back. So £10 shipping is subsidised to the tune of 80% to the UK and then the Chinese government refund as a tax break the full £10 as the person is classed as an exporter.

    So we may suddenly be able to export and do the same twist.

    ! final thought do not let Jeremy Corbyn ever retire and become a hostage negotiator.

    With his remove no deal from the table negotiations would be quick.

    Sorry Mr terrorist but the helicopter and safe passage out with a million pounds is not on the table. But we will send in a couple of Pizzas and cans of drink.

    you all know the outcome then.

    • 1 month ago

      “Consumers think “Wow that’s dear” and buy a British version”

      People do not always buy something that is cheaper / British, I personally would not splash out £600+ for an Iphone when I can buy a British WileyFox for £125, to me they do the same job. Not that I brought it because it was British, just that it did the job I need it for and saved £500.

      My first one I paid £95 had for 2 years and sold it for £45.

    • Marc
      1 month ago

      Only problem is our import is not double our export.

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