Alert for Lithuanian online shoppers: hard Brexit could hit your wallets

The perpetually stalling negotiations over the United Kingdom’s (UK) leaving the European Union (EU), the so-called Brexit, are a matter of some concern for people in different walks of life. One such group is online shoppers. It looks like they could be in for some much harder times.

The Brexit deadline has been postponed repeatedly and is now set at the end of October and it looks like this will be the final date of the negotiations. Until then, the UK and the EU will have to agree on the terms of their divorce, DPD writes in a press release.

Of course, it all can happen much sooner: if the necessary exit documents are ratified, the UK would leave the EU as early as the first day of the next month. Unless the UK holds a European Parliament (EP) election, it would have to step down from the EU in the beginning of June, although this is a highly unlikely scenario. And so is the UK seizing the possibility to cancel Brexit.

“One of the questions that also concerns Lithuanians is how this will affect deliveries of parcels to Lithuania. To make everything, as clear and as stress-free as possible, one of the main tasks for the negotiators is to agree on the terms of the exit and on a transitional period, which should go on until the end of 2020”, said Gabrielius Bilevičius, DPD Lietuva’s Sales and Marketing Director, speaking about the EU–UK divorce.

Online shoppers would be affected

The transitional period in excess of two years should allow both UK and EU businesses to adapt to the shifting business environment. In the worst-case scenario, the negotiators failing to reach an agreement on the terms of exit and a transitional period or no EP election taking place would result in a hard Brexit. In that case, the UK would become a third country and its exports would be subjected to a completely different set of duties than now, when an item is shipped from one EU country to another. Plus, a hard Brexit would probably disrupt goods deliveries to and from the UK for some period of time.

The consequences of a hard Brexit would be felt by online retailers and their clients as well, for the E-commerce Directive, the standard EU rules for resolving all kinds of electronic commerce-related matters, would no longer apply.

“The directive aims to bring down the barriers for cross-border online retail within the EU. Based on the country-of-origin principle, companies based in the UK have to follow the laws of this country and may trade across the EU subject to compliance. Therefore, with this principle dropped out of the equation as a result of a hard Brexit, UK-based online shops would be in a much worse position to trade with the EU countries, having to comply with the rules of every EU country to which goods are being dispatched”’ says DPD Lietuva Sales and Marketing Director.

Loss for Lithuanian on line shoppers

This first of all means that customs will have to be factored in. Therefore, Lithuanians ordering goods from UK online retailers would have to loosen up their purse-strings.

“If the value of a parcel bought from a UK-based online shop and sent to Lithuania exceeds the import duty exemption ceiling, the goods would be taxed just like if they were bought from e-shop in China, the US, or Russia. It means that if the value of a parcel is above 22 euros, the parcel would be subject to declaration and payment of a value added tax and post declaration charges.

Parcels valued at over 150 euros would be subject to customs duties depending on the type of the goods. Therefore, even though goods available at UK online shops might be cheaper, they ultimately could end up being even more expensive than if you would buy them from online retailers within the EU”, said Mr Bilevičius.

And another thing: sending goods to the UK would require filling out a customs declaration as well. On top of that, the various customs checks mean that the goods would take much longer to deliver.

“With a hard Brexit, one should not be surprised if residents of Lithuania turn to retailers closer at hand, such as Lithuanian online shops, for their purchases. So, while the UK-EU divorce could become a period of many trials for some, it might open up new possibilities for others”, predicts DPD Lietuva’s Sales and Marketing Director.