The United Kingdom (UK) left the European Union (EU) on January 31, 2020. In June 2020, the UK formally confirmed that the transition period will end on  December 31, 2020. The UK will not leave the EU single market, customs union and VAT regime until after the transition period.

Pitney Bowes is preparing for all likely scenarios. The current possible outcomes are as follows:

  • Deal: If there is a deal, current cross-border tariffs, fees, charges and restrictions will remain the same until December 31, 2020. Then, starting on January 1, 2021, any newly agreed-upon trade deals will go into effect.
  • No Deal: If there is no agreement, World Trade Organization (WTO) trading rules will start on December 31, at 11 pm GMT. As a result, our carriers anticipate delays for 1-2 days, depending on the destination. However, there may be further delays dependent on the UK export customs and clearance process. Any goods sold between the UK and the EU will become subject to the same requirements as goods from countries outside of the EU. In other words, consumers shipping into the EU from the UK will be required to pay Value Added Tax (VAT), customs duties and potential clearance costs. (Note that local VAT is currently charged on these purchases.)

Whichever the outcome, Pitney Bowes has done extensive risk management to reduce the impact on our customers. As a result, we are prepared to the do following if there is no deal:

  • Update duties and tax calculations
  • Complete commercial invoices, licenses and customs clearance paperwork

What these changes mean for UK retailers and your customers:
No action is required of you to continue selling into the EU. However, we advise you to be prepared for the impact of the customs, duties and clearance fees that will be charged to your European customers.

Please utilize your Client Success Manager to determine the best conversion optimization strategy.

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