What should I do to comply with Brexit regulations?

The United Kingdom has now left the European Union and the transition period, binding the UK to the EU rules ended at 11pm on 31st December 2020. We have created this article to help sellers based in the UK and the EU to prepare for changes coming into force following the end of the transition period. 

About this advice

This article does not constitute legal advice and we have put it together in good faith, from publicly available sources in a background that is fast changing. We will update this article with new information on a regular basis. We encourage you to also carry out your own research and share your findings with other sellers on our Seller Forum.


Artfinder is a trading name of Art Discovery Ltd, a limited liability company and a Certified B Corporation registered in the UK. All our terms and conditions are subject to the English / UK laws. Some considerations (such as VAT tax) might depend on the country of residence of parties transacting on the Artfinder platform. Detailed terms are outlined in our general Terms of Use, Terms and Conditions for Sellers, Commission and Fees Policy, as well as our Privacy Policy. Our terms and policies may be updated from time-to-time in order to bring them in line with the evolving legal frameworks.


Suggestions? If any of the advice published on this page is incorrect or needs clarifications please do let us know by contacting us and we will do our best to review the content as soon as possible.

Considerations

Trade deal

The UK and EU trade deal that was announced on Christmas Eve which defines the trade between the UK and EU from the end of the transition period.


Key areas of consideration

  • Changes to VAT rules on services for EU sellers
  • VAT changes for marketplaces in the EU and UK
  • Introduction of customs duties and taxes between the UK and the EU, meaning that full customs declarations will now be required for trade between the UK and the EU.
  • Expected delays to shipments between the UK and the EU.
  • Shipping rates may change as a result of customs handling. 
  • Use Delivery Duty Paid shipments where possible.

Changes to VAT rules on services for EU sellers

According to the recent advice, the UK tax authority " HMRC has confirmed that many business-to-consumer (B2C) services will follow the same rules for both EU and non-EU customers, and will be VAT-free from 1 January 2021". This means that sellers based in the European Union (and not registered for VAT in their country) will no longer be charged the UK VAT (20%) on Artfinder services, such as the commission fees, subscription charges and promotional package sales ("Service Fees"). VAT will continue to be charged to UK sellers as before. There will be no changes in the VAT treatment to non-EU sellers. We have now added clarifying wording to this effect in our Commission and Fees Policy.


VAT changes for marketplaces in the EU and UK

VAT changes for marketplaces in the EU are coming into force on 1st July regarding imports under €150. This new rule is similar to the one which came into force in the UK on 1st Jan (for imports under £135).


Marketplaces are now required to collect sales VAT at the point of sale, on all imports into the UK under the value of £135 (as of 1st Jan 2021) and on all imports into the EU under the value of €150 (as of 1st July). These new regulations are being introduced to streamline the customs processes on increasing numbers of low-value imports into the UK & the EU. Authorities are passing the responsibility of collecting the VAT in above cases to marketplaces, and the relevant taxes must be collected at the point of sale (previously they may have been collected at the point of import into a country by their respective customs authorities).


Please refer to our recent forum update here for more information on short and long term solutions we plan to implement and this Knowledge Base article. 


All sellers who sold goods on Artfinder subject to this new regulation will need to include a VAT invoice with the shipment documentation. We will provide this invoice to you initially by email from July 2021 (once Arfinder is VAT registered in the EU) and later as an option to download directly from the Seller Portal.


Introduction of customs duties and taxes between the UK and the EU

Full customs documentation will be required for all commercial shipments between the UK and any EU member state (EU to UK and vice versa) to ensure swift processing of your shipments.

Since 1st January 2021, the EU-UK Trade & Cooperation Agreement has allowed preferential zero-tariffs to be applied to goods sent from the UK to the EU and vice versa, if they meet the rules of origin set out in the Agreement.


This means that customs duty is not applied for:

  • Goods of UK origin exported/imported from the UK to the EU
  • Goods of EU origin exported/imported from the EU to the UK
  • To take advantage of preferential tariffs, importers must do one of the following:
  • Provide a statement of origin on the customs invoice, issued by the exporter
  • Hold proof of origin (‘importer’s knowledge’) in the form of supporting documents and records

If exporters are unable to verify the origin of their goods, the importer may be liable to pay the full non-preferential rate of customs duty, and the exporter may receive a penalty, as well as being excluded from using preferential tariffs in the future.


Proof of Origin under the EU-UK Trade and Cooperation Agreement 

A proof of origin statement must be included on the Commercial or Pro-Forma Invoice stating that the goods originate from the UK or the EU.


UK-EU shipments: the origin statement on the invoice can be made out by any exporter who has a GB EORI number. The GB EORI number must be included within the origin statement regardless of the value of the shipment. Check with your courier if you do not have a GB EORI.


For EU-UK shipments: the origin statement on the invoice can be made out by any exporter where the value of the consignment is 6,000 EUR (currently £5,700) or less. Above this amount the EU exporter must have a Registered Exporter (REX) number and include it in the statement. 


Our partner DHL advises to use the following text for the origin statement on the Commercial or Pro-forma invoice:  The exporter of the products covered by this document (Exporter Reference No. (REX or GB EORI number)) declares that, except where otherwise clearly indicated, these products are of ....... preferential origin. (Place and date)* (Name of the exporter).


EORI number required for sellers shipping to or from the EU

EORI stands for Economic Operator Registration and Identification. An EORI number is currently needed to import or export items outside of the EU so this field already existed on most couriers' international shipment booking forms pre-Brexit. After 31st December 2020, UK sellers will also need an EORI number for shipments to and from the EU.

Gov.uk confirms that all UK sellers who trade internationally with the EU (whether they are a business or individual), need an EORI number to move goods between Great Britain and the EU from the 1 January 2021. If you do not have an EORI, you may experience increased costs and delays. For example, if HM Revenue and Customs (HMRC) cannot clear your goods you may have to pay storage fees.

We recommend that all sellers register for an EORI number as soon as possible. It is quick and simple to register and is completely free. Visit the HMRC website: gov.uk/eori – and fill in a VAT registered form or a Non VAT registered form depending on your VAT status.


For artists who are on managed shipping, you will receive an Electronic Customs Documentation form which you will need to complete prior to receiving your shipping labels. On this form, the seller can choose whether they are a “private” seller or a “business” seller. 


If based in the UK and a "private" seller, you will not need to include an EORI number. 

You will still need to provide an EORI number if based outside of the UK, even if you are a private seller. For more information about our managed shipping service, please visit the article Everything you need to know about managed shipping


Some tips on how to ship your art between the UK and the EU after Brexit if you are managing your own shipments

  • Ship with a commercial invoice. After Brexit every shipment will need a commercial invoice, most online shipping providers (DHL or FedEx) have a feature to create an electronic commercial invoice when booking a shipment. Commercial invoices help customs authorities assess duties, taxes and asses goods suitability for transportation in and out of the country. More on How to create a commercial invoice in this article.
  • Ensure clear and accurate descriptions are included with the contents of your shipments.
  • State the origin of the goods, for example, if you are sending an item from an EU member state to the UK but it was originally manufactured in another country, this needs to be made clear.
  • Provide the true value of the goods being transported on the shipping and insurance documentation to avoid queries with customs. If customs believe the value of goods is inaccurate and not a true market price, they may ask for evidence to prove this. This will delay your shipment and even incur additional charges. To find out the correct classification of goods please visit the UK Governments website here.
  • There are no licensing requirements for importing objects of cultural interest into the UK. However, if you are importing items from the EU to the UK or another country outside the EU you’ll need to comply with the EU and individual EU countries’ export licensing regimes. The licensing authorities in the country of export will be able to advise you on what you need to do.
  • We recommend contacting your courier for any further information. It's good to have a shipping provider account manager to help you. Having someone to speak to and act as a liaison to help resolve shipping queries if there is a problem can cut down the time you spend chasing shipping queries. They’ll know whom to speak to get fast answers and solutions if your goods are lost, damaged or held up in customs. We are sorry, but our team isn't able to liaise with shippers on your behalf if you are not enrolled in our managed shipping service.

Expected delays to shipments between the UK and the EU

Given the changes, it is likely that shipments between the UK and the EU may take longer than normal, especially in the first few weeks following the end of the transition period. Complete customs documentation will increase chances for your shipments passing through the border more efficiently.


Shipping rates may change as a result of customs handling

Couriers may revise their rates and surcharges as a result of customs handling. We recommend that you refer to Brexit guides published by your courier of choice and understand what is likely to change. We encourage you to ask other artists too and share your findings on our Seller Forum.


Use Delivery Duty Paid shipments where possible

We encourage our artists to ship orders with Delivery Duty Paid, enabling any customs & VAT charges to be billed back to their own account and to include this cost in their shipping table calculations. That means the sender pays the import duties & VAT and therefore, there are no surprises for customers upon receipt of your artwork. This makes international delivery of your artwork as smooth as possible. 


Sales VAT FAQ

Available on the forum here (you need to be an existing seller to view). 


Where can I find more information by courier?


DHL guides

FedEx guide on EORI numbers

https://ask.fedex.com/help/en-gb/preparing-to-send/definition-EORI

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