Indies ‘furious’ as post-Brexit VAT regulations make EU delivery unaffordable

Independent publishers are reeling from the impact of new post-Brexit VAT regulations, with many “furious” at the lack of government warning and seriously concerned by the financial implications of being unable to deliver books to the EU.

Following the UK’s exit from the European Union and the end of the transition arrangement new rules require businesses to register for VAT, which is now applicable on all sales at the rate charged in the customers country. Sellers may choose to charge the rate and complete the required submission on the One Stop Shop, which will cover all sales to the EU, or charge the customer the excess, to be paid before items are received.

The new rules mean some companies are incurring extra costs, in addition to admin. Trade bodies, including the Independent Publishers Guild (IPG), have called for greater practical guidance to assist publishers, who feel “abandoned” by the government.

Bridget Shine, c.e.o. of the IPG, described the “bureaucratic burden” that a lack of forewarning has placed on small businesses. She said: “We know that many IPG members that handle their own deliveries into EU countries have been hit by extra charges since the start of 2021. While the volume of direct sales to affected countries is relatively small, we shouldn’t underestimate the impact of the changes on specialist publishers in particular, who often have close and longstanding relationships with customers around Europe.

“There has been a heavy bureaucratic burden as well, and the short notice of the Brexit deal gave small businesses very little time to navigate the complicated tax implications. As post-transition trading begins, they will once again have to review costs and logistics in many destinations. The government’s SME Brexit Support Fund has helped some publishers get to grips with new procedures, but with that programme now finishing just as the transition agreement runs out, more practical guidance would be welcome.”

The reaction comes as the Folio Society announced earlier this week the regulations mean it can no longer afford to deliver to 17 EU countries.

Other indies are now experiencing financial losses on a daily basis owing to extra charges, with some having to follow the Folio Society's lead. Comma Press tweeted: "As a result of upcoming changes to VAT (as of 1st July), we've made the difficult decision to temporarily suspend direct sales to the EU through our website. Customers in the EU, please note our books are still available through bookshops."

In a statement on its website, the publisher said: "This is an unfortunate consequence of Brexit, and a decision not taken lightly by a small company that publishes titles we hope our European audiences will purchase and enjoy."

Tom Chivers, director of Penned in the Margins, said: “I'm flabbergasted by how poorly the new tax regulations appear to have been organised by the EU, and how poor and belated the UK government response is.

“From our perspective, EU sales direct to consumer, which is what these new regulations affect, are quite a small part of our business. We may lose a couple of thousand pounds a year. But it's frustrating and, frankly, embarrassing not to be able to deliver our books to one chunk of the world, the EU, because the administrative burden is too heavy for small businesses.”

One such business is indie stalwart Galley Beggar, which regularly sends books to European subscribers. Sam Jordison, co-founder and publisher, said the new VAT rules could be “financially devastating”.

He said: “We've had no warning from the government. Nothing. No one knows what is happening. It's a huge chunk of our business. We have hundreds of European subscribers and we don't know how we're going to get books to them. The idea of signing up for VAT in each territory is incredible. How do you even do that? How do you pay it? Who do you pay? We've had nothing. I've tried to research it myself and all the information out there is contradictory and opaque.

“Does the government even care about the businesses they're putting out of business? It's awful for us — but there must be thousands of people like us around the country. And why? Because of one bad choice a misinformed electorate made five years ago. We knew this kind of nonsense was going to happen. We warned that it was going to happen. But that just makes it feel even worse when it's upon us.”

“I really hope that [Prime Minister] Boris Johnson will have to answer for this sooner rather than later. Although it already feels too late. And where's the opposition? It feels like we've been sent off on this hellride we never signed up for and abandoned," he added.

Divia Kainth, head of marketing and sales at Leicester-based children’s press Sweet Cherry, is among those continually checking their options with regards to exporting items. She said: “Like most indies, we're finding the current climate difficult and are actively seeking international shipping solutions every day. Sweet Cherry is built on the idea of making books accessible and affordable to children around the world and so we are doing everything we can to keep this in mind while we try to find solutions that work for both us and our customers.”

Last week, a London Book Fair seminar heard how Brexit regulations are causing problems for bookshops in Ireland and Europe, with ongoing delays and costs mounting up.