Covid and Brexit: “A hideous cocktail” for businesses
11 January, 2021 / by Pam O’Toole
Image above: Stephen Foster (taken before the pandemic)
Antiquarian bookseller Stephen Foster says he’s usually a very chirpy kind of bloke. But recently, he says, he’s been seriously considering closing down his business for a while.
Why? Well, he says, “It’s a hideous cocktail of Brexit and Covid. It’s a mixture of the two. It’s a lot (to cope with) at once, frankly. I have seriously contemplated pulling the plug on everything for two weeks to let it settle down.”
First came Covid, which decimated his work with film companies (Foster’s has often supplied books as props for the film and TV industry). And of course, the store itself, deemed “non-essential”, has been closed by successive lockdowns. The most disastrous was the Tier 4 closure just before Christmas, which meant Stephen was only able to offer click and collect services and delivery services in what should have been the busiest week of the year. It was seriously bad news for a business that depends a lot on people browsing.
“We were probably running at about five per cent of what we would expect in that Christmas week. Because it was the odd book being sold, the odd person saying ‘I’ve seen something in the window I’d like to buy’, being able to take that payment, pack it up and let them collect it“ he says.
In-store sales losses have been offset by an increase in online sales. But online sales are much more labour intensive. Stephen, who specialises in rare and out of print books, also does a lot of international trade. Which you would think might be a boon under the current circumstances. But that trade has recently been hit by a double whammy – the closure of the French border just before Christmas, in response to the virulent new strain of Covid in Britain, and confusing new post-Brexit regulations.
Stephen says some of the brokers Foster’s normally deals with for international shipping “just stopped taking parcels from us.” Containers were stranded, trucks weren’t moving. Shipments that usually took two to three weeks were taking four to five weeks. Luckily, Stephen says, the December backlog now seems to be clearing.
But now there’s another major challenge. The impact of Brexit. The Government has justifiably been urging people to get ready for changes on January 1 this year. The trouble for ordinary traders is that the deal was reached so late (agreed on Christmas Eve and finally approved by EU member states on 29 December) that, Stephen says, ordinary businesses were not quite sure exactly what changes they were being asked to prepare for. Some systems to deal with any changes were not yet in place. Even tax advisers, he says, were still playing catch-up.
New year new rules
Stephen had diligently done his homework on changes to customs rules and the extra paperwork needed. In fact when businesses reopened in the New Year, a courier picking up books from him congratulated him on being the first customer to have put the correct paperwork on the parcel.
“There’s now more paperwork – every parcel now has to have a commercial invoice in triplicate. There has to be a customs declaration on everything and you have to do an electronic submission as well now, too. And that’s before you get your head around the fact that some countries like Germany want you to charge VAT on imports and register for tax with them.“
“So we have to charge the customers VAT, and I don’t frankly know how I do that on my website. How do we do that if the VAT is different in each of the European countries, which it is? It’s an absolute minefield. I’m a bit confused, frankly.”
Stephen says things should get a bit easier in July, when Europe is due to introduce new regulations which would allow British traders to register for VAT in just one EU country, rather than expecting them to do so in all 27. But that’s six months away. And in the interim, he fears that customers in Europe may end up being forced to pay extra duty on their books. If that happens, he says “it doesn’t take a brain surgeon to figure out that it’s going to filter down to a reluctance to buy from us. You have to logically extrapolate from that when someone in Europe looks at some of those meta websites and sees booksellers dotted all over the world they’ll look at us in England and say ‘well that’s a bit too much trouble, isn’t it?’”
The national press already has stories of people in Europe being hit by unexpected bills for customs charges or VAT after buying goods from the UK, resulting in some people deciding to buy products from inside the EU instead.
Looking to the future
As Stephen says, maybe things will get a bit simpler in six months’ time. But for now, a lot of small traders are facing the same “hideous cocktail” of Covid and Brexit confusion – and the fear that their some of their European customers might desert them.
Since I first spoke to Stephen late last week, things have only got worse. “The brokers we deal with use DPD to ship goods to Europe” he says. “Now DPD’s stopped sending stuff to Europe, so we have to go through a more expensive courier service. So it’s going to cost our customers more.“
And from chatting to fellow booksellers, he finds that people also have different interpretations of exactly which codes they need to include on their export paperwork.
“I’m not coming from any political viewpoint,” he sighs, “but it feels like an act of self harm. Lots of businesses had a system that worked, that is now not working.”
But Stephen’s a determined character. He says he’s now decided not to close his business down temporarily while a new system sorts itself out.
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