Message from ARC to our customers in the E.U.

It was not broke I did not need to fix it. Now I wanted to break it so now we all need to work to fix it.

Trade between the Uk and Eu countries hasn’t always been smooth and without problems, I remember about 25 years ago when working as a Quality Manager at an engineering company producing electrically driven pumps, we were supplying a number of them to a company in Spain. They required us to certify that the electrical side of the product complied with some obscure Spanish regulation, the fact that the product met all required EU regulations wasn’t sufficient for them, not only that they required that all the declarations were in Spanish, this was contrary to EU practice and Spanish was not one of the officially designated languages but English was and always has been. Sorry to sidetrack the thread but it illustrates that our stay in Europe wasn’t always roses but one consolation then was we didn’t have to pay any tariffs to trade with Spain.
Dave W

Hi Martin,

It is a case of swings and roundabouts. Examples:

• When ARC started in this line of business, 98% of its revenue came from hobby customers. Today about 50% of ARCs custom comes from business customers, who are Western manufacturers - small, medium and large. Whilst orders from hobby customers go up and down, orders from business customers continue to grow at a steady pace.
• ARC, along with most trading companies operating in this environment have lost many hobby customers to the likes of operators which you suggest. A certain percentage of that loss is due to the buyer having poor product knowledge, viewing YT videos and buying good or bad products through the sites you mention. Many such buyers are new to the hobby with zero engineering experience. Some loose interest quickly and move on, and some stay, happy with their purchase, or replace with products from reputable companies.
• Many Chinese trading companies operating through fulfilment freight forwarders based in Southampton shut down, or went bust, or moved on to freight forwarder fulfilment centres in Hamburg for example. This took place after UK HMRC warned such UK freight forwarders to clean up their act or be held liable for certain practices. It would seem that the customs in Hamburg are more accommodating to such companies, turning a blind eye. We can only hope that sooner or later they too will/might see the light.
• Things are not so rosy for German companies servicing the hobby/engineering sector. I am aware of well known companies (which I don't wish to name), who are suffering because of such Chinese companies setting up in Hamburg. In one case, to compete against the Chinese trader, the traditional German business changed from a good Chinese supplier to a cheaper bad Chinese source, resulting in poor quality. They are suffering.
• As a wise 'Bandersnatch' (member on this forum) once told me, If we are unable to compete, it would be better to get out of the kitchen. Rather then compromise by failing to supply a consistent product, ARC has dropped sales of quite a few products.
• Regardless of how big the Ali/Banggood/Ebay/Amazon platforms are, they still mainly serve the hobby market, which is far smaller than the business engineering market throughout UK and Europe.

Ketan at ARC

You are probably right Sam. Where there is a will, there is a way.

At present I am content with my lot. Lets see how things develop over time.

Ketan at ARC

To the best of my knowledge, the import duty % will be based on country of origin (i.e. manufacture) of goods. Not sure at present, but unless EU decides to take the U.S. tarriff route/action against China, it could be less than or around 2%, rather than 10%. Also, to re-confirm, the duty element will only apply to goods value (inc. carriage) over 150 euros.

Ketan at ARC

Yes Ignatz, I understand. Depending on which courier is used, they can call it import entry charge, administration charge, or even an inspection charge for anything which enters into the EU from outside.

In my opening post, I mentioned that the couriers we use 'will charge the importer between £11.50 to £13.00 to make an import entry in the country of destination.'

Whilst in your case the courier may have stated 'inspection charge', what they really mean is an admin fee of some kind. It is rare to be charged an actual 'inspection fee' - which is a thing, which someone may charge for physical inspection of goods - by customs - depending on 'which customs route' your consignment goes through. As far as I can recall, Customs route 1 is for documentary check, route 2 for physical examination of goods by customs, route 3 is for consignment to go through without any checks. Usually, this is a random process.

I also understand that the import administration/entry charge can potentially make the difference in one's decision to purchase from a supplier in the UK or a supplier on the continent.

Ketan at ARC.

Edited By Ketan Swali on 10/12/2020 20:50:19

Safe to use?

She is checking if the lathe complies to the higher standard of British health & safety regulations going in force January 1ste 2021.

Ketan, I appreciate this might not affect you directly as it's concerned with EU>UK imports post Brexit, rather than vice versa, (and I think regardless of a deal.)
In a way, it seems to put UK buyers, from EU vendors, in a similar position to your EU customers.

If I've got my head round this correctly, the UK (and I think the EU) are removing the VAT exemption for low value imports.
At the moment in the UK, the VAT and any duties are collected by the carrier, and are due before final delivery; hence Royal Mail etc, leaving a card at the destination address detailing fees to be paid, and their admin charge for that fee collection. (Currently as we are within the EU, so long as VAT is collected at source at the appropriate rate for the vendor's country it's all OK)

When the rules change, VAT is to be collected by the vendor (if commercial, as opposed to a private sale), and must be paid to HMRC directly by the vendor.
In order to make this payment, the EU vendor must create an account with HMRC, for which they are charged a fee.
I believe this applies to non UK landed goods.

There are various press reports about this, but many are behind paywalls; This one explains the gist, and refers to some Star Trek items which is what caught my attention originally in The Times. (Paywall)
https://toyworldmag.co.uk/post-brexit-vat-rules-set-to-cause-significant-impact-on-trading/
https://www.thetimes.co.uk/article/its-vat-jim-but-not-as-we-know-it-william-shatner-laments-post-brexit-rules-5t26rdd6k

Freight forwarders ebay etc. seem to be able to collect the VAT on behalf of the EU vendor, and pay to their HMRC account.

This document seems to go some way towards explaining the situation, see para "How will the operation of VAT change after Brexit?" et seq.
https://www.instituteforgovernment.org.uk/explainers/tax-brexit

A small vendor may well feel that it's too expensive, or too much hassle, and thus not register with HMRC and so not be able to export into the UK.

An example came up on another thread on here where someone was pointed to an EU seller of some collets which aren't common in the UK.
If that vendor doesn't register with the HMRC, they won't be able to export here directly.
Indeed, when I looked at their website, I got a warning flag stating delivery only to EU (along with a couple of other countries, Suisse and Koweit sic.)
https://www.georgessavoie.com/en/store/collets-zugspannzangen-2/product-1.html
[Similarly, if you look at Stefan Gotteswinter's site, he doesn't currently export his precision stones to the UK.
I think this was due to the previous deadlines before the implementation of the withdrawal agreement]

Bill

Edited By peak4 on 10/12/2020 22:35:23

Edited By peak4 on 10/12/2020 22:36:58

"If I'm going to be operating this thing again tomorrow, I'll make sure I wear a top that doesn't clash!"

I hope that I am not being set up here, like that poor girl with the soldering iron!

JimB

ouch!

Anyone smell something burning? no, must be just me then.

Nothing to worry about - she's got her safety spec's on.

Sam's solution is a way ahead, but it's purpose is to circumvent the imposition of trade barriers resulting from a political decision. It's damage limitation with overheads, not an improved way of trading with Europe!

Did voters have this sort of hoop jumping in mind 4 years ago? My impression is they wanted simplicity, less bureaucracy, more local control, conservative methods, and more opportunity. A bright new dawn and sunlit uplands.

Interesting times - this is history in the making. I had to study the French Revolution, Congress of Vienna, the Corn Laws and Gladstone (but not Bismarck - perhaps I was asleep). I wonder what the youth of 2170 will make of our goings on?

Dave

Yes Bill, I am aware of this. I believe that Michael G brought up this issue with the government link back in mid October, on this thread.

As I understand it, EU will have the same policy from 1st July 2021, where exporters to EU will have to have some kind of EU VAT registration for exports from UK to EU from 1st July 2021. I guess the details will get clearer in the coming months.

Ketan at ARC

The general public might not have, but businesses trading with Europe who did not wear rose tinted glasses did, or should have

What I failed to take into account was the way the couriers would react. I could say many less than complementary things about them, I could join the conspiracy band wagon, but at the end of the day, businesses like us - on both sides of the channel - have to find a way to work with the system, whatever the outcome.

Ketan at ARC

I know what the youth of today make of our goings on.

JA

I school they did not allow us to do history more recent than Charles I. I now realise why.

Edited By JA on 11/12/2020 12:56:52

Once the EU and the UK Gov see the effect this has on small business like ARC, they'll remove all these new regulations.

They'd never risk their people losing all they'd worked for just so Gov's could spite one another over Brexit.