Dan Ennor

Checkout tool launched to help UK online retailers with extended Brexit deadline

With the Government extending the Brexit deadline potentially until Halloween, the importance of a tool to help ecommerce brands navigate Brexit trade barriers is increasingly important. As the UK defaults to World Trade Organisation (WTO) agreed export tariffs, it doesn’t change the fact that UK retailers have to prepare for a hard Brexit. Uncertainty for retailers has reached a fever pitch and GFS Checkout with Duties & Taxes Calculator aims to bring clarity to international online delivery tariffs for consumers by estimating the full landed cost of delivery anywhere in the world.

According to recent UK retailer data from Tamebay, respondents showed a clear ambition to want to grow international sales significantly – 76% of UK retailers expect to increase international revenue over the next few years. However, 52% of UK retailer respondents said ‘calculating duties and taxes’ was in their top 3 barriers to international growth - an increasing problem as Brexit trade negotiations continue.

An export issue

The UK also shows a major disparity around exporting versus importing when compared to other nations. As the world’s sixth largest exporter, the UK does punch above its weight, however, we also punch below our potential. According to the IMF, approximately 90% of global economic growth in the next 10 to 15 years is expected to be generated outside the EU. The share of the UK’s exports going to the EU has also fallen, from 55% in 1999 to 44% in 2017. The drop in the EU’s share of UK exports is largely due to declining goods exports, not services.

Better transparency for overseas consumers would impact the UK in a big way. A large portion of the UK’s exports are international, about 25% of all UK dispatched orders are currently sent to non-UK consumers (according to IMRG). While the US is still the UK’s primary export market (18.4%), it’s closely followed by three European states: Germany (9.1%), France (6.6%) and the Netherlands (6.2%). But cross-border goes both ways and UK consumers do buy from non-UK websites, mainly from:

  • Europe – 53%
  • USA – 45%
  • Asia – 44%

How does the solution work?

Retailers can choose to present delivery costs as Deliver Duty Paid (DDP) with all taxes and duties included, or Deliver Duty Unpaid (DDU) with an estimate of the cost to be paid by the customer upon delivery. Additionally, customers can decide for themselves whether they want to pay for Duties & Taxes at the checkout, or when their order is delivered. This means consumers can buy with confidence without the fear of unexpected fees and charges – reducing cart abandonment and returns, and boosting global sales.

GFS is the first end-to-end delivery management provider to introduce a solution that tackles the issue of transparency around taxes and duties for international exports. The role of GFS Checkout with Duties & Taxes Calculator is to present the full landed cost of an order at the point of sale, helping to give consumers abroad the confidence to commit to a purchase, thereby reducing cart abandonment rates and growing international sales.

Retailers need to ensure they prepare for a No-Deal Brexit. The changes to duties and taxes when trading outside of the EU will mean higher cost for delivery at Checkout. Retailers need to have a tool in place that can automate this process, so that their customers aren’t left with an unexpected bill.

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