Commentary

OPINION 3 recent shipping changes small businesses need to know about

Ryan Higginson, VP & UK/ROI Country Leader, Sending Technology Solutions, Pitney Bowes, discusses the impacts of the UK leaving the European Union and changes to Royal Mail policy.

Sending parcels and letters is a critical operation for most businesses. The past year has reminded us just how important these traditional shipping methods have become. Parcel volumes remain high: the Pitney Bowes Parcel Shipping Index reveals that the UK ships around 3.8 billion parcels a year- that’s 120 per second, a number likely to grow considerably. 

Physical mail, too, boosted its value and credibility in 2020. One Royal Mail study found consumers engaged with 96 percent of all mail during the first lockdown period from March 2020. 88 percent of respondents reported paying as much or more attention to mail during this time. The number of people driven to go online following a prompt by direct mail increased 70 percent year-over-year. 

Recently there have been several changes in sending which could impact your business. Here’s a brief summary, with recommendations on what you need to do to avoid costs, delays and interruptions to your supply chain, and where to go for further information: 

Extra customs documentation required for parcels entering EU countries

As the UK has completed its transition and left the European Union, there are some changes you need to know which will impact you if you send parcels to EU countries. Now, some parcels require additional documentation. If you’re sending goods to a country outside the UK, you need to complete a CN22 or CN23 customs declaration form.  If your items have a value up to £270, complete the CN22. If it’s over £270, you need a CN23.  You can find both declarations in downloadable form linked on this page. This doesn’t apply to personal correspondence – just parcels. 

Depending on which form you need to complete, you must capture details such as information on the sender, the value of the package, its country of origin and the recipient’s address. Remember, SAAS and e-commerce shipping applications will help you gather the data required quickly and efficiently, making life a lot easier for you.  We’ve made changes to SendPro Online, to enable clients to complete the relevant fields. Some fields are now mandatory that were previously optional.  The data entered is used to create the Shipping Label, Commercial Invoice and CN23 as required.  

In addition to the CN22 or CN23, if you’re using International Standard or International Economy untracked services, you also need to attach an S10 barcode, which is an item unique identifier. You can order S10 barcode labels at no cost on the Royal Mail website

 

VAT on shipments to Europe

If you are a VAT-registered business you need an EORI number to move goods between the UK and non-EU countries, and since January 1st 2021 you now need one to move goods between Great Britain and the EU. For information on how to apply for an EORI visit https://www.gov.uk/eori

Items sent to the EU from the UK are subject to VAT and duties. If you’re selling goods online to consumers in the EU,  your goods are deemed VAT-free if they are valued at or below €22. Every country may have different requirements – you can find a list here. Many hold the buyer responsible for payment rather than the seller. This could result in recipients having to pay VAT and Sales Tax for merchandise shipments before items can be delivered so do check before sending, otherwise your customers might not have the smooth buying experience you’d planned.

Note there will be changes to VAT obligations coming into place on July 1st 2021. 

The Gov.UK website has very clear information here

Royal Mail Price Changes

From January 1st 2021 new rates have applied to stamped, metered and MailmarkTM mail and parcels up to 2Kg. All products and services are affected by these changes, including 1st and 2nd Class. If you use a meter, you benefit from substantial price advantages over stamped mail. You can find out more about Mailmark here

A first class stamp will now cost you 85p, while Mailmark first class is 72p. For second class mail, a stamp now costs 66p. Mailmark second class mail is 47p. Mailmark also provides savings on small parcels, which can be sent second class from £3.00, or first class from £3.68.

The new business prices can be found on the Royal Mail website here

Unlike other UK carriers, Royal Mail is the designated provider of the Universal Postal Service which means that it provides a six-day a week service with a standard price regardless of location. Its prices remain some of the most competitive in Europe.

At a time when many of us are working remotely, supporting home learning, caring for family members and focused on protecting each other, it can be hard to keep on top of changes such as these. But taking time now to understand new costs and charges will benefit your business.