UK retailers axe deliveries to EU over extra Brexit costs

online shopping 20John Lewis, Asos and Fortnum & Mason are among the first UK brands to scrap deliveries to EU countries, with many citing the introduction of new tariffs on exporting goods following Brexit.

John Lewis told the BBC the decision to scrap overseas deliveries was based on company strategy and that it would be focusing on local UK customers. The company added: “We are no longer pursuing international expansion and decided to cease our online international delivery service in mid-December.”

However, Fortnum & Mason has warned customers that it is currently unable to deliver to Northern Ireland or countries in the EU, while fashion website Asos has said EU delivery options are unavailable.

The move comes just days after it was revealed that a growing number of online retailers in the EU are refusing to deliver goods to the UK because of new taxes and increased paperwork.

According to one report, Dutch Bike Bits said it will now deliver to every country in the world except the UK, while Belgian retailer Beer On Web has insisted it will also pull out of the UK market due to the new measures.

Michelle Dale, VAT manager at accountants UHY Hacker Young, said: “Many UK businesses exporting to the EU are going to be hit by tariffs. Businesses have also been completely blindsided by the ‘rule of origin’ part of the deal, which leaves them at a major competitive disadvantage when selling in the EU. Unfortunately, not enough was done to prepare them for this.”

Under the clause, goods made, or containing more than 50% of components made, outside the UK or EU – such as in China – and resold by UK businesses are now subject to VAT and import duties when sold to consumers who live in the EU.

Dale explains that many British businesses exporting to the EU have much of their supply chain based outside the EU, meaning they will fall foul of the clause. Some have suspended sales to customers in the EU as they try to establish whether import duty is due or if they can switch to UK or EU components.

The food and drink industry has already waded into the row, warning the rules effectively block existing supply chains, and have urgently raised the issue with both the UK Government and the European Commission.

The UK’s Food & Drink Federation head of international trade Dominic Goudie said the group was “very concerned about the implications” of the clause for food and drink suppliers in both the EU and UK.

He added: “Goods shipped to distribution hubs in Great Britain face the payment of full EU tariffs when they return to the EU and, as a result, suppliers are being forced to cancel the delivery of products to customers in Ireland.”

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