CREG subscribers in the EU

[David Gibson]

This is a message directed mostly to CREG's subscribers in the European Union, but it might be more widely of interest.

If you are NOT a European Union subscriber to the paper edition of the CREG journal, this message does NOT apply to you.

Summary: Due to changes to the EU's import regulations we might not be able to mail the next CREG journal to our EU subscribers when it is ready in two weeks' time. It might be late arriving, or you might be asked by your local postman or delivery agent to pay a handling fee to receive it. If you are asked to pay a fee you can, of course, refuse. The reasons for this problem are explained in this message.

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On 1 July 2021, the European Union abolished the scheme known as Low Value Consignment Relief (LVCR). That scheme meant that items valued at under EUR 22 were not subject to import VAT or duty. (Many countries have a similar scheme in place). Thus, all goods entering the EU must now be declared at the border using an electronic customs procedure and are now subject to a VAT payment. The difficulty is not really this payment,but the large handling fee that is also charged to the customer. This varies from country to country and is reportedly anything from EUR 8 to EUR 25.

There is an international scheme in place where the sender of goods can pay the EU import VAT, thus allowing free and uninterrupted transportation of the goods. These arrangements are in place for large businesses and online marketplaces. For example, if someone in France were to order a product from an Ebay seller in Australia, Ebay would collect the VAT from the Australian seller and pass it directly to the EU.

In the UK, if I want to send a parcel to an EU country, I can pay the VAT via an online parcels courier. But the UK's Royal Mail has not – as yet – implemented a 'Delivery Duty Paid'scheme for the sending of *letters* by individuals or micro-businesses. If CREG were a large business, we could register directly with the EU to obtain what is known as an IOSS number, and use that with Royal Mail to pay the import VAT. But this is simply not an option for small businesses, let alone micro-businesses like BCRA and CREG.

This means that there is NO MEANS by which CREG can pay the EU VAT on your CREG journal and we can only send it as 'Delivery Duty Unpaid'. The package might get through if it is mistaken for a personal mailing but, of course, CREG is not a person and it would be a customs offence for us to deliberately label the package incorrectly. Thus it is likely that your journal will be impounded until you have paid the VAT and a handling charge.

Of course, you are within your rights to decline to do that, and the item will be returned to us (hopefully). If you do decline to pay, please let us know and we will either give you a refund of your subscription fee, or an extension for one further issue (hoping the situation will be resolved by December), or we can convert your remaining subscription to an online-only subscription at GBP 4 per year.

This action by the EU affects all countries importing into the EU – not just the UK – although clearly, if the UK was still a member of the EU we would not have this problem. The EU decided on this change to customs procedures to try to put overseas marketplaces (e.g. Amazon, Ebay) on a level footing with EU businesses. Sadly, it does not recognise that the international shipment of printed papers has long been established as a worthwhile activity.

In principle, the electronic system ought to manage but, here in the UK, there seems to be a large amount of chaos surrounding the implementation of the system. Individuals and micro-businesses seem to have been totally forgotten. Additionally, the legislators appear not to have considered how multi-drop shipments might work. For example, we could not even collect your subscription fee via Ebay unless you ordered and paid for each journal separately, because there is no mechanism for a shipment to be made independently of its payment transaction.

Hopefully, Royal Mail will catch up eventually, and thus this problem will be temporary. If it remains a problem, one option would be for us to ship the CREG journals as a single parcel (paying the necessary VAT and duty) to a CREG volunteer in one of the EU countries, who would then buy postage locally and post them on to our EU customers. We only have about ten customers in the EU who receive the CREG journal on paper.

CREG journal 115 is about to go to our printers, and should be posted by 7 September. If you live in the EU, please let us know your experiences!

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David Gibson

[David Gibson]

A CREG subscriber in Germany asked me ...

if the Royal Mail has not a 'Delivery Duty Paid' scheme, how have you been sending the mag. to places like Australia, who are not in the EU?
Can't you use that scheme?

The difficulty is that the EU has abolished its "low value consignment relief". Usually, countries have a lower threshold, below which they will allow goods in without payment of tax and duty. That applies to Australia. Thus for posting to Australia we just drop the letter in the post box. The Customs label says it is worth GBP 2.70, which is below the threshold, so Australia lets it in.

However, if we do the same action for EU countries, the letter will be held by EU customs until the recipient pays the VAT due on it - because the LVCR of EUR 22 has been abolished and the threshold is now zero. The problem is not really the VAT - which is an annoyance of course - its the large handling charge that is levied at the same time.

Its an absolutely crazy situation. Firstly, that the EU should do this at all for "printed papers", and secondly that the UK's Royal Mail is unable to cope with "over-the-counter" postage payments to the EU. Parcels firms have adapted, but not Royal Mail.

I am hearing rumours than non-EU countries are thinking of abolishing LVCR too - including Norway, Switzerland and Australia. I think that the thought behind it is that large international marketplaces like Ebay and Amazon have an edge over domestic sellers, and its an attempt to redress that. In principle that is fine as a policy (although "printed papers" are surely a valid exception?) - its just that implementing it has been a real mess. I am utterly astonished at the incompetence of Royal Mail, who have messed it up right from the start.

What I would suggest is that you keep your paper subscription going, but if you are asked to pay a delivery fee, just refuse. We will ensure that we refund you for any undelivered item, and the situation may have settled down in a few months.