British consumers could be hit by a devalued Pound, and higher import taxes, if the UK leaves the EU, following the 23 June referendum, according to an international shopping website.
Cross-border online shopping is popular in the UK. 36% of British shoppers said last year that they had bought items online in other countries, according to a survey conducted by PayPal, with Amazon, eBay and Etsy being some of the most popular sites.
Research indicates that tech gadgets from the US, and cheap clothes and jewellery from countries such as China and India, are some of the consumer products increasing online sales in the UK.
My International Shopping, which helps people consumers make international purchases online, has now investigated the effects Brexit might have for consumers.
“Many shops from the UK, and all over the world, are growing their international sales and it is clear that Brexit could have a large impact on these, at least in the short term,” said Nick Beeny, the founder of My International Shopping.
However, products sold in the UK could also become cheaper for overseas shoppers, and benefit British retailers, such as ASOS and Boohoo.
Currently, buying goods and services from other EU countries excludes import duty, as the EU is a free-trade area. But import tariffs could be reintroduced in a renegotiation of the UK’s membership of the single market.
The likely shipping and packaging costs for British consumers are still unknown, as trade tariffs are negotiated on a country-by-country basis. UK customers currently pay 2.5% for gifts worth between £135-£630.
On Thursday (17 March), in Brussels for the refugee summit, Prime Minister David Cameron was reassured that EU leaders will back the European Commission’s proposed move to introduce more flexibility in EU VAT rules, with a specific reference for sanitary products.
The fact that EU officials have shown willingness to overhaul the rules is a sign of the influence the UK is able to exert in the run up to the 23 June poll.
The British government was able to claim an unlikely victory at the EU summit on migration tonight (17 March), after securing a tax break on tampons.
On Wednesday (23 March), the European Commission will propose legislation allowing all member states to lower VAT on products to 0%, if another EU nation has that rate on the product.
When EU VAT rules, which require unanimous support from all member states to change, came into force, those countries that already had 0% VAT rates were allowed to keep them.
The Commission will give member states a second option on VAT. That would allow countries to adopt the rates they want on their choice of goods and services, but only if this does not create unfair tax competition or undue complications.
- 23 March: European Commission to propose giving member states a second option on VAT.
- 23 June: UK referendum on EU membership.
- PayPal: Cross-border consumer research 2015
- My International Shopping: How will international shopping be affected by Brexit?
- Countries and regions: Comprehensive Economic and Trade Agreement (CETA)