The impact of Brexit is still playing out with sellers and their partners getting to grips with new processes and requirements. In February, we brought a panel of experts together to explain the current state of play and to answer key questions to help sellers navigate the new rules.
Amy Freelander, Senior Product Manager at Linnworks explained how the company has made over 30 changes to its platform in anticipation of Brexit. These changes are ongoing as the new system unfolds and Amy emphasised how it is important to be responsive to these new rules and processes as an when they happen. For example, government policy on how to send packages to Northern Ireland is currently on Version 14.
Shipping changes are primarily on a per-courier basis. For example, merchants will find that customs forms will differ slightly between Royal Mail and FedEx. New customs borders, such as that between the UK and Northern Ireland, means that customs data must now be included on a per-package basis, including EORI number, value of goods and tariff code. Amy highlighted the new Customs Docs feature on Linnworks which streamlines the process. The forms can be provided digitally as well as hard copy, including when signatures are required. Extended properties on the Linnworks platform allows merchants to input item-level customs data in a tailored fashion which is particularly useful when recording whether VAT is inclusive or exclusive with each package.
Marketplaces within Linnworks has also seen a smaller number of changes due to Brexit. Amy observed that the major change for these sales channels is the need to collect tax for their customers selling to the UK from the EU when the orders are for £135 or less. This is known as a Facilitator Tax. As marketplaces, such as Amazon, eBay and Fruugo, will be taking tax, the Linnworks system has been updated to make the marketplace’s VAT number available to invoice templates. It is also possible for customers to send VAT rates to the marketplaces when listing items. Other marketplaces are still introducing new requirements so Amy said Linnworks will continue to adapt to new changes over the coming months.
Chris Gates, Product Owner at Linnworks talked the audience through Inventory Management Processes which are also being impacted by Brexit. Chris described how Linnworks has traditionally seen online sellers position stock closer to buyers as their business expands into new markets. This is in order to offer both faster delivery and better customer service. This tactic has become even more appealing with Brexit due to the new complications and uncertainties over cross-border trade.
Chris detailed how Linnworks can help ensure that orders are automatically fulfilled from the right place. Orders must be analysed as their received; they must be assigned to the appropriate warehouse; and the localised buyer-facing documentation, such as labels or invoices, must be produced. Automating this not only saves time and resources but reduces the risk of human error too. The Linnworks Rules Engine requires no code and is intuitive for staff to use. The Linnworks’ Warehouse Transfer is another tool which gives warehouse managers the clarity they need to know what stock is required and where to source it from. An audit trail and up-to-date information on inflows and outflows of stock puts managers in full control.
Marketplace Specific Inventory Sync is a feature that Linnworks has had in place for some time, but Chris has seen its popularity has grown in recent months. The feature is useful for merchants when they are not able to ship internationally on a profitable basis and wish to avoid customer disappointment. The feature ensures sellers only advertise items on channels, such as Amazon, which are currently available in a local fulfilment centres. An alternative solution is to use International 3rd Party Fulfilment Centres which can greatly reduce the barriers involved, but the data exchange must be robust to coordinate fully between the parties. API integration is the best solution but Linnworks can handle a range of formats.
Kevin Srithevan is UK Account Manager the ShipStation. The company became the original shipping app for eBay in 2009. It has gone from strength to strength over the last decade and last year made one billion shipments across 4 countries. Kevin focused on how sellers can automate their customs declarations and how they can apply rules to automate local and international shipping.
All UK sellers are now required to have a VAT registration alongside their EORI registration. ShipStation has updated its platform for this information to be quickly added and this can be done for multiple numbers if the seller ships for multiple clients. Kevin emphasised that sellers will also need to review their commercial terms, delivery policy and the VAT on the import of goods, for example stating whether it is the seller or the buyer who must pay the VAT. Amazon and eBay are putting processes in place to charge VAT at the checkout so sellers must take each channel policy into account when creating their own customs forms.
Now that import and export documents are required for all international shipments (including Northern Ireland), product descriptions need to be as accurate as possible, whether that be the content type, the country of origin or the commodity (HS) codes. Kevin highlighted that customs agents will be using the information on the forms to decide the correct duty to be paid, either by the seller or the buyer. ShipStation are striving to create speed through automation, so that whichever channel a merchant uses to sell, the required customs forms are created seamlessly.
Kevin also touched on Chris’s point regarding the benefits of keeping inventory in the EU to remain as close as possible to those customers. He highlighted the changes with Amazon in particular. The biggest change affects those using Fulfilment by Amazon (FBA) from within the UK and those sellers will now need to export to FBA–EU although Amazon are offering to help reduce the cost of transporting goods to European fulfilment centres.
Q – When sending a package from the UK to Northern Ireland, which EORI number should be used?
A – You have to use a EORI number that is prefixed with XI unless you are based in a part of the EU that is not the UK or Northern Ireland.
Q – My customers’ VAT numbers are not being copied to the customers documents. Why might that be?
A – The VAT number normally represents the party who paid the VAT which is normally the seller. However, different carriers required different information so it’s always best to check with them first.
Q – What does the seller have to do regarding the Facilitator Tax?
A – This tax is not specifically Brexit related and as a seller there is nothing you need to specifically do unless you are selling on Amazon who require you to upload a copy of the customer-facing invoice. It must show the Facilitator Tax and the Linnworks platform does that for you automatically.
Q – Do we require a VAT number for each country we supply to?
A – This question may require professional tax advice. Linnworks has customers that organised their VAT in this way so some companies may find this advantageous. Seek professional advice.
Q – Can ShipStation provide in-transit reports?
A – Transit updates depend on the carrier. FedEx is one example of a carrier who provides this information.
Q – My courier is not on Linnworks. How do I create custom templates that have all the required customs information?
A – Linnworks has created a generic template available via the Knowledge Base.
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