This midnight the divorce between the United Kingdom and the European Union was consummated, after almost 4 years of the holding of the referendum that approved this decision. Since then, tense negotiations have taken place to try to minimize the consequences that this new situation will bring, which will undoubtedly have a significant impact on the businesses of the countries facing this march, with the United Kingdom on one side, and Europe on the other. continental.
This rupture creates a new scenario of generalized change from the political, legal and economic point of view. Therefore, e-commerce business owners must undertake their own process of adaptation to the new situation, given the foreseeable loss of competitiveness and commercial attractiveness of British e-commerce .
But not only entrepreneurs will suffer the consequences of Brexit, but consumers will also have to assume and suffer the new situation that will irreversibly affect one of the most powerful and developed e-commerce markets in the world .
And although the situation keeps changing from one day to the next, it is best to stay well informed and be aware that certain conditions may change in the future. Therefore, we want to summarize in this special what awaits us if we want to continue shopping online in English stores . Stay tuned because this interests you. We started!
Customs tax increase
Starting today, an 11-month transition period begins in which different possible scenarios are considered: a hard Brexit with tariffs set by the World Trade Organization (WTO), an area of free movement of goods through a customs union, a pact of free trade with tariff exemptions, or integration into the European Free Trade Association to continue within the common market as before, but without submitting to the EU regulatory framework.
If you go the hard way, the UK will no longer be able to maintain current customs and tariff privileges , making cross-border sales much more complex.
The most logical consequence is that our UK eCommerce purchases will have to bear customs duties and value added taxes . Transactions will lose interest, deliveries will not be as efficient, and there will be delays due to possible customs hold. Think about shipping problems, delays and returns when shopping on AliExpress.
That is not to mention the increase in export costs that the owners of online businesses will have to assume without as many resources as large corporations such as Amazon. As is logical, to face these costs, either they choose to raise prices or they assume a lower profit margin for the sales made.
New regulatory measures
Until now, the UK was under the regulatory framework of the European Union when it comes to the eCommerce sector. After the consummation of Brexit, the British government will have to define a new regulation as it no longer depends on Brussels .
In short, this translates into bureaucratization and increased cost of the buying and selling processes , in addition to causing legal disagreements between both territories, making electronic commerce difficult.
However, it is foreseeable that the United Kingdom will not carry out a drastic modification of its new regulation , since, until now, it has barely made use of the margin of flexibility in the interpretation and application of the Community rules relating to e-commerce.
Threat to the protection of personal data
This point is quite tricky, since, from now on, the United Kingdom would be considered as a third country . Faced with this new situation, the British government would no longer be obliged to strictly comply with the management and data protection standards established by the European Union.
This means that the entire battery of Internet-related laws that have recently been implemented in the European Union will no longer be applicable to the United Kingdom . Also just when it is just over a year since the entry into force of the General Data Protection Regulation or GDPR (for its acronym in English), now subject to an exhaustive evaluation process scheduled for next May to correct the main shortcomings of this new plan.
Nor can we ignore that the community government could not include the United Kingdom in the list of safe countries. What does this mean? That, as a consequence of the aforementioned, the European Union considers that the treatment, management and transparency in the transfer of personal data to the United Kingdom by European citizens do not have an adequate level of protection .
Variations in exchange rates
Due to the constant changes arising from the consequences of Brexit and the negotiations inherent to this process, the threat of continuous fluctuations and loss of value of the pound sterling are constant. This is something that, initially, does not pose a major problem for buyers on this side of the English Channel, since we would benefit from a greater purchasing power of the euro in the face of the devaluation of the pound .
It will force eCommerce business owners who work with multi-currency to be very attentive to the adjustments caused by this period of uncertainty . At least until these 11 months of transition to the new scenario in relations between the EU and the United Kingdom expire.
The most advisable thing for online business owners will be to take advantage of pricing plans or identify a fixed exchange rate that does not affect their activity and helps maintain our interest as buyers.
As we can see, nothing will ever be the same. But don't worry, the moments of transition are always the most difficult. Over time, we will have normalized the new situation in the UK's relations with the European Union. And what do you think of all this? Let us know in the comments section.