Crossing Borders with Ease – EU Sellers' Guide to Conquering the Amazon UK Market Post-Brexit

Cross-border Shipments to Amazon UK After Brexit: Successful Customs and Delivery Management

For businesses looking to export goods to the UK, there are several factors to consider to ensure a smooth delivery process. Below, we outline essential aspects to keep in mind for cross-border shipments to the UK.

VAT Registration in the UK

If you intend to store your goods in the United Kingdom, it is a legal requirement to register for Value Added Tax (VAT) in the country. This applies to both FBM-Sellers, who have their own warehouses in the UK, and FBA-Sellers, who store their inventory in Amazon Fulfillment Centers on the island. Trade activities must be reported to the respective tax authorities. 

Identifying the Right HS Codes

When engaging in international exports, Harmonized System codes (HS codes) are used for the description and coding of goods. These codes facilitate the classification of goods and provide a standardized identification on an international level. To determine the appropriate HS code for your goods, you can access various resources.

Firstly, you can find HS codes on the website of the UK government, which provides specific information for trading with the United Kingdom. Additionally, the Market Access Database of the European Commission offers information on HS codes for trade within the European Union. When determining HS codes, you may also seek assistance from the product manufacturer or an experienced customs agent. These professionals possess the knowledge and expertise to identify the correct HS code for your specific goods.

The accurate allocation of HS codes is of great importance as it forms the basis for customs clearance and the correct application of customs rates and procedures. By diligently identifying and recording the HS codes, sellers can ensure that their goods are properly classified and comply with customs regulations.

Applying for a Valid EORI Number

The EORI number (Economic Operators' Registration and Identification) refers to the registration of a customs number for sellers located outside the United Kingdom who intend to send goods through customs into the UK. Without an EORI number, delays may occur during customs clearance, leading to disruptions in the delivery process and financial losses. Therefore, it is essential to provide a valid EORI number to the carrier for every shipment to ensure the timely arrival of the goods at their destination. 

Collaborating with Customs Agents

Due to the constantly changing laws and regulations in the United Kingdom and the European Union, it can be beneficial to involve an expert in handling the various aspects of customs compliance. A customs agent serves as a bridge between sellers and customs authorities, ensuring that all necessary steps are properly executed, such as import declarations, preparation and submission of documents, resolution of customs disputes, and handling of customs payments.

The service costs for customs agent support can vary depending on the provider and the scope of services. It is advisable to find out about the cost structure in advance to ensure transparent pricing 

UK Expansion Made Easy: Amazon Programs 

With the two shipping programs, European Fulfillment Network (EFN), and Dual Inbound, Amazon provides sellers with efficient and practical ways to deliver their products to the UK and navigate the challenges of the new trading environment.

Dual Inbound

Participating in Dual Inbound (also known as Cross-Border Inbound) gives you the opportunity to split your inventory and ship your goods to both Amazon Fulfillment Centers in the United Kingdom and the EU. This option is suitable for FBA-Sellers and Vendors. By shipping products from the same country as the end customer, delivery times can be significantly reduced. This allows for a smoother, faster delivery process and can contribute to increased customer satisfaction and positive reviews.

In this model, you are required to submit customs declarations. As the Importer of Record (IOR), you must send your goods to Amazon using the Incoterms Delivered Duty Paid (DDP) and fulfill the necessary customs requirements for cross-border shipping. In most cases, it is advisable to appoint a person or a company to handle customs matters on your behalf. Additionally, you will need a valid Value Added Tax Identification Number (VAT ID) for the United Kingdom.

Another aspect of Dual Inbound is the local shipping fees. Since you will be storing and shipping your goods in both the UK and the EU, you should consider the corresponding shipping costs, which can vary depending on the location and service level.Furthermore, an Economic Operators' Registration and Identification (EORI) number is required to import goods into the UK and handle customs formalities. This number serves to identify the company in the customs system and is essential for the smooth flow of trade.

European Fulfillment Network (EFN)

With the implementation of Brexit, the United Kingdom was initially excluded from the Amazon Pan-EU program. However, since March 2022, the United Kingdom has been reintegrated into the European Fulfillment Network (EFN). This allows EU sellers to deliver items to customers in the United Kingdom. Sellers are eligible for participation only if their item price is up to £122.

In the Amazon EFN program, products are not stored across European borders. Instead, Amazon utilizes FBA inventory in the EU to fulfill orders from the United Kingdom. Therefore, you typically do not need to register for VAT in the United Kingdom. However, there will be cross-border shipping costs for you to consider, which should be factored into your product pricing.

For B2C orders with a VAT value of up to £135, the EU seller conducts a VAT-free export delivery. Amazon.co.uk then applies the so-called "Import One-Stop Shop" (IOSS) scheme. This means that Amazon is obligated to account for VAT and remit it to the relevant tax authority. For all B2C orders exceeding £135 in VAT and for all B2B orders, Amazon collects an import fee from the end customers, which is provided as an estimated value at checkout. These amounts can, however, deter customers and potentially lead to a negative impact on the conversion rate.

Additionally, every order shipped to the United Kingdom must include a commercial invoice. This is an export document that provides information about the sender, shipping terms, contents of the shipment, and the value of the goods being sent. 

To participate in the European Fulfillment Network (EFN), certain requirements must be met. These include access to Seller Central, sufficient inventory in the EU for UK orders, and consideration of EFN fees. Activation is done through Seller Central by listing products and enabling offers for the UK market. When manually activating, prices need to be adjusted for exchange rates, shipping fees, and VAT. EFN fees should also be taken into account during this process.