Company ‘paralysed by Brexit’ forced to open warehouse in Holland
- Credit: Horizon RMS
A company “paralysed by Brexit” has been forced to launch a £100,000 operation in Holland in a bid to get around new overseas VAT complications.
New rules after Brexit mean packages arriving into Europe must have their VAT paid for one day before delivery as opposed to being accounted for afterwards like before.
The rules also require those at the delivery address to pay, not head offices or accounts teams – meaning shops and customers are forced to pay VAT for packages or have them returned to the UK – incurring more costs.
The charges have been described by one customer as “a ransom note” and “a complete surprise” before the shipment can be delivered.
Horizon Retail Marketing Solution based in Ely offer point of sale displays for shops and businesses in the UK and in Europe.
With a large amount of business coming from Europe, this new change will impact Horizon as well as other businesses greatly.
Director Andrew Moss, who started the business from his bedroom in Ely 12 years ago, now has a team of 37 staff to look after and has had to take drastic action.
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“We’re discovering things before the Government is and it’s impossible,” he said. “It’s just an absolute nightmare.
“And when you combine that with all the Covid problems we just want to give up and go home, we are struggling to trade .”
After the problems emerged, luxury food shop Fortnum and Mason – who have a base in Sutton – decided to stop exporting to European countries.
In reply to a customer on social media, a spokesperson for the brand said: “At this current time, due to Brexit restrictions, we are unable to send any products to European countries.”
In a bid to get around the issue, Mr Moss has formed a new company in Holland, that way he can ship things to his warehouse in Europe to avoid the VAT fees for his customers.
He said: “The fact that we’re having to take what little cash we have and spend on starting a business in Europe is unforgivable.
“We have to form a business in Europe, open a warehouse and send trucks to Holland every week to allow us to distribute our goods direct to each European market.
“That is the only solution, there isn’t any alternative. So this is the new future and the new future is as about as different to 2020 as I can possibly tell you.
“We thought that with a deal, things would be relatively seamless and would empower us to go out and get more business.
“But the red tape, the mountain of red tape, is so significant that there's no way that the Europeans are going to continue to work with companies that are just based in Britain.
“It’s going to be too hard for them and there's going to be too much paper work, too much admin time – as well as effecting their cash flows”
“The only way that UK companies can react is by establishing bases in Europe.
“That’s not what it was about, Brexit was about making Britain great again... it wasn’t about taking all of our hard-earned money and investing it in Europe.
“Since last week we’ve managed to establish a warehouse in Holland, start the process of registering horizon in Holland.
“We’ve had to agree transport to and from Holland with a view that in six weeks' time we’ll be ready to trade with Europe in similar ways that we did in 2020.
“A year of trading will ultimately cover the cost of the investment that we’re making – but the thing is that if we don’t make that investment, we won't be trading at all”