As Britain prepares for the Brexit vote on June 23rd, ParcelHero, the large and heavy courier experts, issues a timely industry report looking at the hidden costs to business and consumers should Britain opt to leave the European Union.
ParcelHero predicts the effects of a vote to leave the EU would be:
- A typical rise of 30% in costs on an imported item due to:
- An average 5%-9% added to the price of an item in duties (where duties apply, depending on the item)
- Plus VAT of 20% (including shipping & insurance) when buying from countries within the EU – and only reclaimable in you are VAT registered
- Plus increased transport costs – the UK outside the EU would be a less competitive market for international couriers
- Plus ‘customs clearance’ charges from a courier company: typically around £15
- The average SME regular importer/exporter to the EU (excluding ‘one man bands’) will be spending around £163k extra annually, including duties. The UK will face £11bn in new tariffs on imports of £220bn.
- A typical £150 purchase from the EU will now cost around £195, an increase of £45 or over 30%.
- Businesses and consumers will face a mass of new red tape: Customs forms with proof of origin for every shipment arriving in the UK would be required
- SMEs and internet traders will find EU suppliers three times more likely to prefer to trade elsewhere in the EU than with the UK.
- The cost of consumer goods will rise by around 32% if the UK follows the model of countries such as European non-EU member Norway. A typical pair of Levis 501 jeans that costs £56 in the UK costs £71 in Norway and £81 in Switzerland; and a £59 pair of Nike shoes costs £77 in Norway and £88 in Switzerland.
- British exporters seeking to price goods competitively could easily fall foul of the Union’s protectionist anti-dumping rules and face extra duties
- Britain might not qualify for the many favourable trade agreements negotiated by the Union with key countries and markets around the world, including the planned TTIP between the US and EU aimed at removing most customs duties.
- Choosing to set our own tariffs would mean moving outside the EU’s Common External Tariff. That entails setting our own duties on 19,000 individual tariff codes – a move leading to increased border delays and red tape for EU businesses looking to trade with the UK.