Brexit could cost consumers 30% more – Parcelhero

If we leave the EU, UK citizens could see a price rise of up to 30% on goods shipped from the EU and the average SME importer could pay more than £163,000 in red tape and transport costs according to delivery company Parcelhero.

David Jinks, Head of Consumer Research at Parcelhero calculated that the typical rise of 30% in costs would be down 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.

Jinks added: “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.”

He also concluded that: “A typical £150 purchase from the EU will now cost around £195, an increase of £45 or over 30%.”

Simple monetary costs aren’t the only issue according to Jinks. The report also argued that “businesses and consumers will face a mass of new red tape” as “Customs forms with proof of origin for every shipment arriving in the UK would be required”.

ParcelHero claimed that its research “reveals that increased delivery fees and higher import costs following the UK’s exit from the EU will hit SMEs and start-ups particularly hard; and add significant complication and increased expense for UK internet retailers and online marketplace traders doing business with the EU”.

As a consequence, claimed Parcelhero: “What might look like an exit could in fact become a wall between the UK and EU.”

In the interest of fairness, Parcelhero said there may also be benefits from Brexit. There are “benefits that might be gained for shippers of parcels, SMEs and small businesses were Britain to leave the EU”.

“While the EU has reduced average tariffs from 5 per cent in 1990 to 1 per cent in 2011, those on footwear and clothes remain high, which makes it difficult for more efficient producers outside Europe to export to the EU,” according to the report.

“Taking control of these tariffs may encourage trade with a wider variety of nations. This means withdrawing from the EU altogether could potentially reduce the prices of imported goods from outside the EU, on the assumption that the UK reduced tariffs to below EU levels.”

The report said that there were “strong reasons why Britain may have success if it votes to leave the European Union”, but then asked the rhetorical question: “Do they outweigh the evidence of ParcelHero’s own overseas shipment numbers and the level of duties and increased customs procedures and delays… that would strike an independent UK?”

The full report at: www.parcelhero.com/brexit

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