Post Brexit import experiences

Pop C · Nov 8, 2021

I just carefully read the whole thread and can't help feeling very disappointed in Aero Leather.
I live in France and was considering ordering a B10 and (later on) an A2 from them but I'm feeling reluctant now to pay the extra 20% because Aero can't be bothered.
Brexit has been a hard blow but many UK companies have shown their consideration for us EU customers.
In this particular case, it feels like a let down .

Harris HTM · Nov 9, 2021

Pop C said:
I just carefully read the whole thread and can't help feeling very disappointed in Aero Leather.
I live in France and was considering ordering a B10 and (later on) an A2 from them but I'm feeling reluctant now to pay the extra 20% because Aero can't be bothered.
Brexit has been a hard blow but many UK companies have shown their consideration for us EU customers.
In this particular case, it feels like a let down .

Especially when you consider that the huge majority of the UK shops (basically all that I have used, and I've used quite a few) have already solved this problem by either removing the British VAT or covering the EU one.

Pop C · Nov 9, 2021

Which means that it is feasable. And that it takes a few weeks to solve the problem.

So the only explanation for Aero's stand is: we don't care. Nice.

I've spent several weeks to figure out where I'll order my first A2 from and now that my choice is made... I'm gutted.

Harris HTM · Nov 9, 2021

Pop C said:
Which means that it is feasable. And that it takes a few weeks to solve the problem.
So the only explanation for Aero's stand is: we don't care. Nice.

I have no knowledge regarding taxation or law, so I have no idea how easy or fast or expensive is to follow the example of the rest of the UK shops.
I've also read here that the two other Scottish leather jacket makers do exactly the same as Aero does, please fellow members who have bought from them correct me if I'm wrong. Maybe it has to do with England / Scotland?

Marc mndt · Nov 9, 2021

Harris HTM said:
I have no knowledge regarding taxation or law, so I have no idea how easy or fast or expensive is to follow the example of the rest of the UK shops.
I've also read here that the two other Scottish leather jacket makers do exactly the same as Aero does, please fellow members who have bought from them correct me if I'm wrong. Maybe it has to do with England / Scotland?

Maybe Aero not deducting VAT for European customers doesn't have anything to do with (possible) difficulties of implementing.

If they'd deduct VAT for European customers, they'd also have to start deducting VAT for American customers. Which is something they never done. Deducting VAT on sales to the US would mean 20% less revenue from American customers.

Al 916 · Nov 9, 2021

We do not know Aero's business financials or the bigger tax, profit picture etc.

Maybe a little harsh to assume that a company that (in my dealings) show incredible levels of Customer care cannot be bothered..

Pop C · Nov 9, 2021

That sounds like cognitive dissonance to me.

A bit of communication from the company on this matter wouldn't hurt.

Bottom line is: how comes the prices shown are VAT included for UK customers and VAT free for non UK-customers?

Still no answer to that question, correct me if I'm wrong.

Edward · Nov 9, 2021

Pop C said:
That sounds like cognitive dissonance to me.

A bit of communication from the company on this matter wouldn't hurt.

Bottom line is: how comes the prices shown are VAT included for UK customers and VAT free for non UK-customers?

Still no answer to that question, correct me if I'm wrong.

The company has commented on this in the past when it affected the US; this has come up again as an issue with the EU market now that the UK has gone from member state to Third Country status. I'm sure the old thread is around somewhere, but the gist of it is that Aero's position was they charge a price that they regard as their 'no VAT' price everywhere rather than add the upcharge to cover VAT in the UK, and eat the VAT themselves by taking the 20% hit from their profit margin for their UK customers. It's not an explanation that is universally liked, but that's long been their position, it's just now affecting the EU market because the UK is no longer a member.

MrProper · Nov 9, 2021

Edward said:
The company has commented on this in the past when it affected the US; this has come up again as an issue with the EU market now that the UK has gone from member state to Third Country status. I'm sure the old thread is around somewhere, but the gist of it is that Aero's position was they charge a price that they regard as their 'no VAT' price everywhere rather than add the upcharge to cover VAT in the UK, and eat the VAT themselves by taking the 20% hit from their profit margin for their UK customers. It's not an explanation that is universally liked, but that's long been their position, it's just now affecting the EU market because the UK is no longer a member.

I had also read that and also received it as an explanation. You can do it that way, but it is not a professional procedure.
In any case, it discourages me to continue buying there. 20% price increase at Aero, while at many others the price is constant, is psychologically anything but smart.
Apparently the 20% was given to EU customers before Brexit and now all of a sudden it's not? There is simply no reason for it, other than to maximize profits.

Mich486 · Nov 9, 2021

Mmm… so they’ve been paying the VAT out of their profit also for EU customers up until 31/12/2020? Or rather they’ve been overcharging US and RoW customers, depending how one looks at it

To be honest whatever side I look at this only one approach makes sense and it’s defensible, and it’s the one that 99.99% of businesses that sell internationally take: deduct local taxes on foreign sales.

If they’ll ever decide to do things properly I’m conscious that it’ll probably mean a price hike before VAT for everyone as they’ll want to maintain at least the same level of profit.

They are a bit in a bizarre/uncomfortable position now (they read the forum and decide not to address this) on this and they should have done things properly to begin with.

Harris HTM · Nov 9, 2021

Mich486 said:
Mmm… so they’ve been paying the VAT out of their profit also for EU customers up until 31/12/2020?

I do have the exact same question.
Let's assume a 600 pounds jacket.
if I, from the EU, buy it today, then the sales order will read net value 600, VAT 0 (I know for fact because I received a jacket last week). Then I'll have to pay my local VAT, totally fine.
if someone from the UK buys the same jacket then the sale order will read net value 500 and VAT 100, the customer pays 600, Aero pays the VAT (100), totally fine.
Up until last year, if I bought the same jacket, then I'd see in my order net value 500 and VAT 100 (I know for a fact, I'm what is described here an "Aero fan boy" and have ordered many many times from them). I'd pay 600. What happened with the 100 pounds of the VAT?
Do I miss something?

Pop C · Nov 9, 2021

By reading the latests posts here one can tell how confusing their stand is.

To say the least, it is very surprising coming from an esteemed brand with outstanding customer service.

Let's suppose they change their position on the VAT problem in the near future, i guess they'll be flooded by reimbursements inquiries and rightfully so, as they've been overcharging non european customers for years.

And I don't swallow the "we ate the 20% VAT ourselves". No business manager in his right mind would do that.

I don't want to sound too harsh, i just don't understand, none of this makes sense.

Harris HTM · Nov 9, 2021

Pop C said:
By reading the latests posts here one can tell how confusing their stand is.

At the absence of their explanation (at least an explanation that does not raise more questions) all the rest is speculation. Let's stick to presenting the facts and asking questions and hopefully an official explanation will be provided.

MrProper · Jan 11, 2022

Very positive experience with Ironheart.
I ordered 3 belts from ironhearteu.com the day before yesterday.
The prices are displayed in EUR and already include all possible costs. I.e. customs, shipping, handling costs etc. are included if you order more than 200 EUR. Otherwise 30 EUR will be added, which is still partly cheaper than customs + handling + shipping separately.
I.e. no surprises, no time delays. That's how it has to be.
By the way... ordered the day before yesterday, yesterday still a query from Ironheart, this afternoon delivered with UPS.
Really fast.

Bat02 · Jan 13, 2022

It's safe to assume that it's not so much a "can't be bothered" thing but rather a, "we've been getting away with it for so long why change" kind of situation.

Sticking to the facts:

We've seen that the receipts from before and after BREXIT shows VAT disappearing.
The "worlwide price" and the reasoning they gave to US customers back in the day show they're aware of it and it's their official position on the matter.
Other UK companies operate differently since BREXIT: Private white, IronHeart ...

I don't think there's anything left to discover at this point. For this to change it would take one of three scenarios to occur:

Sanctions: UK tax office to catch them in the act because an angry customer has reported them or because they caught a tax official has launched an investigation and witnessed their practice.
Drop in sales: depending on how much of their profit are exports based, and how widespread is the outrage around their VAT handling practices is, they may be seeing a drop in sales so signifcant that they're forced to make a change.
Change of heart: least likely to happen but they may see how others have done it and decide that it's finally time to make a change (but why bother if people are ready to pay 20% more for your products and you can pocket that).

As outrageous as this is, let's not forget that Aero is just 1 store and a little bit of exports. It's not a major brand in terms of Brick & Mortar stores or sales. That's why we love them, that why we praise their craftmanship, customer support and so on. That's also why they can get away with a little shady practice here and there just like your local auto/ bike shop would.

Tom71 · Jan 13, 2022

MrProper said:
Very positive experience with Ironheart.
I ordered 3 belts from ironhearteu.com the day before yesterday.
The prices are displayed in EUR and already include all possible costs. I.e. customs, shipping, handling costs etc. are included if you order more than 200 EUR. Otherwise 30 EUR will be added, which is still partly cheaper than customs + handling + shipping separately.
I.e. no surprises, no time delays. That's how it has to be.
By the way... ordered the day before yesterday, yesterday still a query from Ironheart, this afternoon delivered with UPS.
Really fast.

IH are really second to none in terms of customer services.

Rich22 · Jan 13, 2022

Tom71 said:
IH are really second to none in terms of customer services.

With something like a 100% markup on their Japanese prices, they should be ;-)

Turnip · Jan 13, 2022

MrProper said:
…
I.e. no surprises, no time delays. That's how it has to be.
…
Really fast.

Same experience with my order from Schott US here. Transparent costs, no surprises and fast delivery.
Similar for ordering from Mr. Bezos in USofA with the benefit of no additional shipping costs at standard delivery for the patient, taking up to two weeks.

Wildhorses · Jan 25, 2022

Same thing for me, I would have loved seeing Aero do the same thing as IronHeart. IH did slowly raise their prices each year, but they created a european site to avoid the VAT issue after brexit. Aero won't do this, they are a small company, and they will still have buyers anyway. Last year I did a custom order. Because of leather shortages, I have been waiting since september to get a jacket that will be there next monday, with DHL. I just paid the taxe$ ($$$). It did cost me a little 320 Euro for a value of 735 pounds + shipping (around 900 Euro). I have been buying an Aero per year for the last 10 years (and sold a half of them), but things will change now. I have too many jackets, and I won't be accepting that tax again. Hopefully the jacket will be exceptional.

Marc mndt · Jan 25, 2022

Wildhorses said:
Same thing for me, I would have loved seeing Aero do the same thing as IronHeart. IH did slowly raise their prices each year, but they created a european site to avoid the VAT issue after brexit. Aero won't do this, they are a small company, and they will still have buyers anyway. Last year I did a custom order. Because of leather shortages, I have been waiting since september to get a jacket that will be there next monday, with DHL. I just paid the taxe$ ($$$). It did cost me a little 320 Euro for a value of 735 pounds + shipping (around 900 Euro). I have been buying an Aero per year for the last 10 years (and sold a half of them), but things will change now. I have too many jackets, and I won't be accepting that tax again. Hopefully the jacket will be exceptional.

So that's €1220 total for an Aero? That's crazy. How did they calculate VAT, €320 sounds like a lot.
I'd expect €900* 0.20 (VAT)= €180
What's the remaining €140 for? DHL handling fees?

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