The document discusses the impact of Brexit on UK eCommerce businesses that sell to customers in the EU. Key points: - Post-Brexit, the UK will no longer be part of the EU VAT system, adding complexity for sales to EU customers. Customers will have to pay import VAT and deal with paperwork for returns. - This will negatively impact the customer experience and put EU governments between UK businesses and their customers. - The obvious solution for UK businesses is to move warehouses and jobs to the EU to continue serving EU customers seamlessly. - Losing access to the EU's single market will significantly disadvantage UK eCommerce businesses compared to their EU competitors.

1. BREXIT BREXIT Sauce
With a side order of Big Government
The impact on your eCommerce UK based business

2. The Post-BREXIT Situation is unknown
● Except that we do know that the UK will no longer be in EU VAT scheme
post-BREXIT.
● We can define the impact of this as the EU already processes parcels from
outside the EU.
● These problems have one obvious and simple solution. Which will be bad
news for anyone working in a UK based eCommerce warehouse.
● If you are a driver, fork-lift driver, picker, packer, dispatcher or manager or
anyone who wears a High-Vis jacket at work read on..
● Because Vote Leave won’t tell you this. Or even that the EU is important.

3. Hey you!
● You are a young fashion designer, product developer, manufacturer or
wholesaler and you are about to launch your new range.
● You have sourced products from within in the UK, within the EU and from
outside the EU, India, China etc which have cleared customs.
● All of your products are in a UK warehouse and your UK team are ready to
dispatch these direct to consumers around the world.

4. What the EU can offer you?
Come and compete across 28 states, but follow these basic rules of cross-border
trade:
● Make products to the same standard as EU competitors
● Don't reduce costs by cutting staff benefits
● If customers give your data, then keep it secure and don’t misuse it
● Charge customers the correct VAT and remit it to right Government
● Tell us about cross-border movement of goods via INTRASTAT reporting
In return we keep out of your way, deal with your customers and tell the relevant
Government about it afterwards.
You will be following many successful UK businesses (see list on last two slides)

6. The UK to export
the same as the
top 5 EU markets
combined!
Cross-border
eCommerce to
grow from 8% of
exports to 18%

7. The UK to has a
MASSIVE eCommerce
cross-border TRADE
SURPLUS with ALL EU
markets

8. French consumers are
at home, buying
fashion, to be
delivered direct from
UK warehouses.

9. The UK is Awesome at eCommerce
The UK leads in eCommerce because we have
Single Brands - Superdry, Dune London, Cath Kidston, Laura Ashley, Burberry ...
Online and Offline Stores - Selfridges, Harrods, House of Fraser, Debenhams ...
Online Only Stores - ASOS, Net-a-Porter, Mr Porter, The Outnet ...
Online Marketplaces - ASOS Marketplace, Farfetch, Made.com Notonthehighst …
And thousands of other businesses exporting to the EU. We are also successful
at exporting to the USA. The UK is at the cross-roads of two great eCommerce
markets. We want to continue with both, but BREXIT gives us a big disadvantage
in EU cross-border eCommerce sales.

10. A Consumer Sale and Return As-Is
1. You get a web order from Germany.
2. You charge the customer in Euro, the total price including German VAT at
19%.
3. You send it to the consumer, but they don't like it so they return it and you
refund them the sales price and VAT.
4. Did you spot the red tape?
Because there is no Government employee involvement during the sale, there is
no political influence. Say a French MP is asked by a boutique owner to reduce
UK eCommerce sales to protect local shops, there is nothing that they can do
about it.
Let’s add BREXIT BREXIT sauce with side order of Big Government

11. A Consumer Sale and Return Post-BREXIT
1. You get a web order from Germany.
2. As the UK is outside of the EU VAT system, you don't charge the consumer
German VAT. This is in place for non-EU sales today including into the UK.
3. Once the package arrives in Germany the consumer is contacted and told to
pay the Import VAT, once this is paid the items delivered to the consumer.
4. When they don't want the item, the consumer has to obtain proof of postage
and fill in a form in order to reclaim the Import VAT that they paid from
German customs.
5. When the goods come back to the UK they refunded the the sale amount.
6. Lots of red tape!

12. A Consumer Sale and Return Post-BREXIT
1. So the consumer has to pay twice to purchase and get paid twice to get a
refund. It is typical for fashion eCommerce sellers to see 20%-40% returns.
2. The consumer may guess, but won’t know how much Import VAT will be
charged until told. So they cannot be certain on the price they are paying. Say
a package contains kids clothes, makeup, a watch and snacks, which Import
VAT rate will the Agent apply? The correct one for all items, or just the highest
rate on the watch and apply that to the whole package. Either way as a
Government employee, he isn’t getting sacked.
3. This is not an EU process so Import VAT payment will be different in every
EU state many are paper based for non-EU imports.

13. A Consumer Sale and Return Post-BREXIT
5. The goods are only released for delivery when Import VAT is paid. This will
add at least 1-2 days delay to the delivery.
6. So now Government employees are right between you and your customers. If
they go on strike, your EU competitor packages sail by, whilst UK ones are
held up.
7. If an EU Government decides to reduce manning in Import VAT collection,
which increases delays for UK eCommerce orders, there is nothing a UK
business can do about it.
8. Of course BREXIT means the UK unilaterally withdrawing from the EU
market, the Consumer can order from an EU based website and avoid this
hassle, bypassing UK warehouse workers in the meantime.

14. A Consumer Sale As-Is
1. You get an order from Spain.
2. Your charge the customer in Euro, the total price including VAT at 21%.
3. The customer loves the product and keeps it.
4. You tell your accountant and they record the sale on your UK VAT return, you
pay the VAT in £ and it is sent to the Spanish government.
5. If this sale exceeds the VAT threshold then they will register you for VAT in
Spain and you will pay the amount in €
6. You report the goods movement via INTRASTAT reporting
A Consumer Sale To-Be
1. You don’t charge or remit VAT or do INTRASTAT reporting

15. The Problem
● For consumers, the process of buying from a UK business is now significantly
worse, it takes longer to get deliveries from the UK, they have to pay twice, be
refunded twice and are never sure exactly how much they will pay.
● The UK businesses loses control over large parts of the process and can’t
influence Import VAT collection in EU countries.
BREXIT’s unilateral withdrawal from the EU VAT scheme has put your business at
a significant disadvantage serving EU customers compared to your EU
competitors and also put Big Government (not the UK!) between you and your
customers.

16. The Scale of the issue
● ASOS alone has 2.4m active EU customers.
● The UK has 30% of the entire eCommerce market!
TOP 12 COUNTRIES SHARE OF EUROPEAN B2C E-COMMERCE MARKET Share of European B2C e-commerce market, 2014

17. The One Obvious Solution
● For this issue, there is one obvious answer. UK eCommerce businesses are
aware of this and will have two years to plan. They will take action beforehand
and see both consumer and business sales reduce
● The solution is simple, only service UK sales from UK warehouse and move
those EU consumers and EU business customers to be served from a
new warehouse, located within in the EU.
● So, take those lorry driver, forklift truck driver, supervisor, manager,
picker, packer and dispatcher jobs and export them to Hamburg.
● Don’t forget those in the Finance Dept who currently compile and file EU
VAT returns.
● To BREXITers these are just collateral damage.

18. Impact on Post-BREXIT trade deals
● So everyone has more work to do, the UK Ecommerce business, the Delivery
Company, Tax Collection and of course the Consumer. More work equals
increased costs and someone will have to pay, it is always the citizen either
as taxpayer or consumer.
● VAT is a low-cost tax collection for Governments. Businesses tell them after
the fact about their transactions and pay the relevant VAT. Now instead
Governments will need to collect it from every single parcel, increasing their
costs. If they don’t then those EU based businesses would be unhappy to be
undercut by 20% by UK competitors. Again someone has to pay.

19. Don’t Panic!
● UK businesses could register for VAT in the EU by creating a local business,
but goods being imported from the UK will still have to go through this process
so it won’t solve the problem.
● BREXITers have the solution for everything, Big Government in your
business, they are going to replace EU trade with other trade deals, but they
will never be as simple as the current EU VAT trading.
● Is it really this bad? No it is probably worse. We can tell the impact of leaving
the EU VAT scheme but probably tariffs and duties would also be payable
confusing the consumer and making them pay more depending on the post-
BREXIT model.

20. The Commonwealth
● BREXITers will tell you they are going to replace EU trade with the
Commonwealth, but we already trade with Malta and Cyprus within the EU.
● ASOS and others are very successful in selling to Australia and NZ already so
why do we need a new trade deal? How will it improve? The same applies to
USA why do we need a trade deal when we sent them $1.1bn of goods?
● For many Commonwealth countries there are barriers to eCommerce:
○ Low number of users with good internet access
○ Low number of users with cards and high costs and limited options for card processing
○ Poor or limited delivery and return options
○ High cost of shipping from the UK (It is a long way away!)
○ Language and cultural differences
● India’s eCommerce market was $1.4bn in 2013, South Africa’s was $1.0bn.
The EU28 in 2015 market size was EUR368bn (+13.7%).

21. Don’t choose Big Government in your business
● eCommerce businesses trade where possible, we don’t need to choose one
market over the other, we should choose and and and.
● So UK PLC, you have millions of customers across the EU, are you going to
vote to give them delayed service, paying twice, harder returns and Big
Government service levels? Or create jobs in the EU. All to swap for unknown
and smaller markets. That doesn’t make business sense.
● Just remember post-BREXIT models and trade deals are not on the
referendum on June 23.
● On June 23 you can just vote to leave the EU VAT scheme and cause
these problems and export our warehouse and finance jobs.
● Then you can hope that Big Government is coming to rescue your
business or your job.

22. BREXIT BREXIT Sauce
With a side-order of Big Government
In the back of the cupboard since 1975, lets leave them there.
Fact and sources check
http://goo.gl/2vrGk6

23. Internet Retailer Top 500 UK Based eCommerce brands
selling to at least one other EU country
Leading
Asos, Clarks, Debenhams, Marks & Spencer, New Look, Next, Office,Superdrug, Topshop, Tesco.ie
Top 50
Blacks Outdoor, Carphone Warehouse, Dorothy Perkins, Evans ,Hobbs, Holland & Barrett, Maplin Electronics, Miss Selfridge,
Monsoon, River Island, SportsDirect.com, Superdry, Topman, Wallis
Top 100
The Body Shop, Burton, Cotswold Outdoor, Dune London, Evans Cycles, Fat Face, Footasylum. French Connection, Game, Go
Outdoors, Jack Wills, JD Sports, Jigsaw, Joules Lakeland, Laura Ashley, Littlewoods,Moss Bros. Mr Porter Net-A-Porter,
NotOnTheHighStreet.com, Selfridges Space NK, Thorntons, Waterstones, White Stuff, Yours Clothing

24. Internet Retailer Top 500 UK Based eCommerce brands
selling to at least one other EU country
Top 250
The Book People, Boux Avenue, Burberry, Cass Art, CC Fashion. Chain Reaction Cycles, Charles Tyrwhitt, Cloggs, Coast, Cotton
Traders, Direct Golf, Dr. Martens, EAST, The Edinburgh Woollen Mill, Ellis Brigham Mountain Sports, The Entertainer Fragrance
Direct, Harvey Nichols, Hawes & Curtis, Hotel Chocolat, L.K.Bennett, Liberty Long Tall Sally, Lovehoney, Lush, Millets, Mobile Fun,
Mountain Warehouse, The Outnet Paul Smith Photobox PrettyLittleThing, Radley, Route One, Snow+Rock, SportsShoes.com, Sweaty
Betty, Thomas Pink, The White Company, Whittard of Chelsea
Top 350
Agent Provocateur, Andertons Music Co, Appliances Direct, Art.co.uk, Blackwell’s, Book Depository, CycleSurgery, Farfetch, Flannels,
Fortnum & Mason, Guitarguitar, IWOOT, Lyle & Scott, MatchesFashion.com, Mint Velvet, Molton Brown, Mulberry, Oliver Bonas,
Paperchase, PartyDelights, Pavers, Phase Eight, Rohan, Whistles
Top 500
Calendar Club UK, Charles Clinkard, Coggles, Tweeks Cycles, Dyson, Farrow & Ball, Fred Perry, Hackett, Jimmy Choo, JML, Links of
London, LookFantastic.com, Made.com, Mainline Menswear