HELSINKI, FINLAND-CIRCA APR, 2018: Motorcycle outfit as riding boots is in the Allright shop in Vantaa retail park. It is store with motorcycles and racing equipment selling
Does Brexit mean the days of buying discounted motorcycle gear from EU countries is over? ABR’s legal expert Andrew Dalton explains all.
Buying motorcycle gear is an expensive hobby which is why many of us shop around online for a good deal. A quick internet search will find you a cheap pair of, say, Alpinestars boots over- stocked by an Italian wholesaler, or take you to a Finnish retailer selling off last year’s Rukka stock at discounted prices.
In days gone by, you’d place your order, sit back, and wait for your goods to be whisked across the continent and delivered to your doorstep here in the UK. However, post-Brexit, we are no longer a member of the Customs Union, so the free movement of goods is no more, and the whole process has become more complicated.
The Withdrawal Agreement from the EU has various provisions for exporting goods from EU countries to Great Britain, with VAT rules that are dense and confusing. As they settle down, they will become familiar, and I expect buying goods from people in the EU will become more straightforward. In the meantime, navigating the new process continues to be problematic.
The basic rule of thumb is this. If the item you order costs less than £135, the retailer collects VAT at the point of purchase. However, if the process goes slightly awry, or mistakes are made, the final delivery courier gets to be an unpaid tax collector demanding the money from you on your doorstep.
Over £135, and things become more complicated, and that is the price point above which most motorcycle gear is sold. So, for goods worth over £135, VAT is collected at the point of delivery, or in other words, you. You may also be asked to pay customs duties which range from 0% to 25%.
On top of this, delivery companies have started charging additional handling fees to cover admin costs and extra customs checks. Royal Mail, for example, is charging an £8 fee. Add all these additional fees up, and they may well cost more than the discount you got in the first place.
If all this sounds complicated, it’s also a headache for the businesses trying to sell to you. Will EU companies bother calculating what import duties, VAT, admin fees, and extra haulage costs are due on individual bits of kit. Some will. Some, I suspect, will not. Great Britain certainly represents a big enough market for big hitters like Alpinestars, Rukka, Dainese, and Schuberth to keep supplying goods, and they are of sufficient size to register with HMRC as foreign VAT payers.
If you are, for example, Rukka, it’s worth your while jumping through the HMRC hoops. You can fill up a truck with fine and expensive Finnish waterproofs and go through the carnet hassle, because your volumes and margins are worth it. Not so much use to the small Finnish or Italian retailer selling off last year’s Rukka or Alpinestars stock to individual buyers at bargain prices online.
Some of the big EU discount clearing houses, I suspect, won’t want to lose the large British motorcycling market and will set themselves up so that VAT, and potentially import duties, are built into their websites. However, I suspect these will become rarer because, as a business proposition, they’re a lot of hassle, don’t offer huge rewards, and you only need a few orders to go wrong on small margin items for the EU vendor to decline to send to a British address.
The result of all this is that British motorcyclists are more likely to be making their single retail purchases of bike gear from British retailers in the future.