BREXIT the silver lining or lead cosh?

[Woosh]

I was thinking that too. I've got a feeling that Boris will start copying Trump. Our economy will boom, but ebikes might become more expensive. Maybe more people will then make them in the UK, which makes more jobs and potentially more profit.

I think the market's response to Bojo's announcement that the transition will not be extended is clear: the market likes certainty (UK will ratify the WAB in the next few weeks) but not him removing the flexibility at the end of the transition. Johnson does not have to do that, bravado costs jobs.

 

[Wisper Bikes]

Any speculation is probably shaky at the moment. Wisper are certainly moving production from Taiwan to Portugal so we can confidently expand and service the European market, we sincerely hope that we will be able to export from Portugal to the UK without penalty. If that's the case, there is no need to even think about Chinese bike building again as Portugal is now less expensive than China.

Wouldn't it be great if there actually was a boom and the £ actually did get back to it's post referendum announcement levels? Imports including eBikes would be so much cheaper.

 

[Woosh]

I am not too worried about the exchange rate. Us leaving the EU will help Woosh out in a big way. I am fed up with ebay and amazon sellers shipping in kits from the EU27 without charging VAT. Unfair competition.
After 1 Jan 2021, the UK won't be in the common VAT area anymore, those shipments will not be possible. We'll have a more even playing field.
Also, I would like our government to retain anti-dumping on bikes. Building locally promotes R&D.

 

[Wisper Bikes]

I agree re AD, now we have all sorted ourselves out we certainly don't want the disruption again, it was expensive and most importantly blatantly unjust but the money has now been lost or spent and we move on. If I were a betting man though I would say that AD will end in 2021.

 

[Bonzo Banana]

Lots of mechanisms you can use to control imports including higher sales tax on items that are mainly imported. One advantage of no tariffs on Chinese bikes is now people can choose those instead of EU assembled bikes and there might be a large price saving meaning our trade deficit slightly reduces. One huge impact on our economy was trade tariffs that made products mainly manufactured or assembled in the EU a better option than chinese goods but still a grossly inflated price compared to non-tariff Chinese goods. We are a high cost country to manufacture so it didn't benefit us much it was mainly a disadvantage resulting in a greater trade deficit.

I'm sure in the short term the pound will drop in value, unemployment will increase and the UK economy will be slightly de-stabilised but I'm extremely hopeful in the longer term leaving the EU will be hugely beneficial although of course that depends on the competency of the politicians plus with 1.8 trillion of public sector debt since joining the EU it will be many decades before we can clear that debt which works out at about £60,000 per income tax payer and interest is being added to that all the time. There is about £2,000 of interest per year per tax payer and in the short term I'm sure borrowing will continue to get the country through the initial effects of leaving the EU.

 

[Woosh]

One advantage of no tariffs on Chinese bikes is now people can choose those instead of EU assembled bikes and there might be a large price saving meaning our trade deficit slightly reduces.

taxes on import go to HMRC, the effect on our public borrowing is not significant. The general rule is more tax deters consumption but really it's the availability of cheap credit is the real driving force.
The current anti-dumping duty on Chinese bikes has effectively forced assembly to be moved to the EU. Wisper moved production to Portugal, I assemble in Southend. Life goes on.
If we don't tax EU bikes (in the case of a CETA type deal with the EU), then the market remains favourable to EU bikes. If we exit the transition under WTO rules, then the situation will reverse. Smaller firms like mine will benefit from WTO brexit.

 

[Deleted member 25121]

plus with 1.8 trillion of public sector debt since joining the EU it will be many decades before we can clear that debt

And likely to rise significantly post Brexit witness the recent public spending plans.

 

[Bonzo Banana]

And likely to rise significantly post Brexit witness the recent public spending plans.

I personally don't see how it can be done any different in the short term in the transition period. We have been in the EU many decades and it will probably take an equal amount of time to pay back the debts we have built up sadly. Remaining in the EU was unsustainable unless we massively lowered our costs in the UK and started trading successfully with the EU achieving a surplus not only to reduce public sector borrowing but to pay the EU membership fee too. I'll admit I did vote remain in the referendum purely because of the uncertainty of leaving but I was pretty much 50/50 at the time however since I've looked more deeply into the figures at the office of national statistics I've realised how wrong that decision was. It feels like the path is set now.

 

[Bonzo Banana]

taxes on import go to HMRC, the effect on our public borrowing is not significant. The general rule is more tax deters consumption but really it's the availability of cheap credit is the real driving force.
The current anti-dumping duty on Chinese bikes has effectively forced assembly to be moved to the EU. Wisper moved production to Portugal, I assemble in Southend. Life goes on.
If we don't tax EU bikes (in the case of a CETA type deal with the EU), then the market remains favourable to EU bikes. If we exit the transition under WTO rules, then the situation will reverse. Smaller firms like mine will benefit from WTO brexit.

I must admit I'm unsure how the tax system works completely when you factor in tariffs. I assume if I buy a Chinese e-bike currently from a EU registered business and its shipped from mainland Europe and the sales tax is processed in that country I would assume both that the tariff is paid by the importer to the government of their country and the sales tax goes to the government of the reseller's country with possibly the importer and reseller being the same actual business for direct sellers at least. I would imagine no tax is paid here in the UK on that purchase but I don't know for sure.

I've seen that Halfords buy in e-bikes often assembled in the Czech Republic although it looks like pretty much every part is made in the far east including the frame so HMRC gets their VAT on the sale and the Czech Republic and assembly factory owner benefit from the assembly work which adds some costs to the UK consumer.

I don't know how it works for countries outside the EU that have favoured trading status and may assemble e-bikes, countries like Cambodia, Vietnam, Bangladesh etc. Their trading status seems to be on shaky ground, I've seen recent news about Cambodia losing their EU trading status due to human rights abuses etc. Some of these countries seem to manufacture the frame, wheel rims and some parts but most of the e-bike specific parts are imported from China it seems.

I see Halfords offer e-bikes as low as £399 at times, they look awful to say the least with 24V batteries and hub motors likely well below 250W maybe more like 180W but still very cheap all things considered. I've no idea of where that model comes from logistically. Could it go even cheaper?

 

[Nealh]

The cheap e-bikes in most part are ideal in most part for peeps who don't ride to much or only want a local run about, the problems is that peeps don't know or can't be bothered how to carry out simple repairs to a bike and when that happens they are abandoned in the garage or shed. Tbh the leccy side has little to go wrong with it, biggest issue though is peeps have know idea what so ever of how to look after a lithium battery or under stand how lithium works.
In most cases they won't be of no use to them with in a year or two so can workout as an expensive item.

 

[Woosh]

I must admit I'm unsure how the tax system works completely when you factor in tariffs. I assume if I buy a Chinese e-bike currently from a EU registered business and its shipped from mainland Europe and the sales tax is processed in that country I would assume both that the tariff is paid by the importer to the government of their country and the sales tax goes to the government of the reseller's country with possibly the importer and reseller being the same actual business for direct sellers at least. I would imagine no tax is paid here in the UK on that purchase but I don't know for sure.

duty on imports at the moment go to the EU for operating the customs union. The collecting authorities (HMRC) retains 10% of the receipts to cover operational costs. The local authority is also charged with defending patents and such likes on imported goods. There was a recent case of the EU taking HMRC to the ECJ on the ground that HMRC is too lax with Chinese importers, some of them importing fakes into the UK and use platforms such as ebay and amazon to sell fakes into the EU27.
From 1/1/2021, the UK will exit the EU's customs union, HMRC will retain all import duties paid by importers. That is why WTO brexit is tax-wise attractive as we import a lot more from the EU than export to the EU.
VAT is paid directly to HMRC. However, the UK is in the EU common VAT area. That allows crossborder trade without any form of checking except when the authorities suspect that a particular shipment breaks EU rules or a product of criminal activity. Every year, HMRC loses about £1 billion in VAT fraud, mostly by Chinese importers. They sell crossborder without charging VAT, so their goods appear to be 20% cheaper, gaining a competitive advantage on platforms such as ebay and amazon.
From 1/1/2021, the UK will exit also the common VAT area except possibly Northern Ireland. Such illegal crossborder sales will cease.

 

[Bonzo Banana]

duty on imports at the moment go to the EU for operating the customs union. The collecting authorities (HMRC) retains 10% of the receipts to cover operational costs. The local authority is also charged with defending patents and such likes on imported goods. There was a recent case of the EU taking HMRC to the ECJ on the ground that HMRC is too lax with Chinese importers, some of them importing fakes into the UK and use platforms such as ebay and amazon to sell fakes into the EU27.
From 1/1/2021, the UK will exit the EU's customs union, HMRC will retain all import duties paid by importers. That is why WTO brexit is tax-wise attractive as we import a lot more from the EU than export to the EU.
VAT is paid directly to HMRC. However, the UK is in the EU common VAT area. That allows crossborder trade without any form of checking except when the authorities suspect that a particular shipment breaks EU rules or a product of criminal activity. Every year, HMRC loses about £1 billion in VAT fraud, mostly by Chinese importers. They sell crossborder without charging VAT, so their goods appear to be 20% cheaper, gaining a competitive advantage on platforms such as ebay and amazon.
From 1/1/2021, the UK will exit also the common VAT area except possibly Northern Ireland. Such illegal crossborder sales will cease.

Wow that sounds hugely positive for the UK and I didn't even realise how bad the current situation for the UK was. Very interesting although slightly depressing too.

 

[mike killay]

taxes on import go to HMRC, the effect on our public borrowing is not significant. The general rule is more tax deters consumption but really it's the availability of cheap credit is the real driving force.
The current anti-dumping duty on Chinese bikes has effectively forced assembly to be moved to the EU. Wisper moved production to Portugal, I assemble in Southend. Life goes on.
If we don't tax EU bikes (in the case of a CETA type deal with the EU), then the market remains favourable to EU bikes. If we exit the transition under WTO rules, then the situation will reverse. Smaller firms like mine will benefit from WTO brexit.

Sh, don't tell Old Groaner!

 

[Nealh]

Old Groaner or Older Downer !!!!