Tariffs as high as 45%! The British bicycle industry has been hit hard and sellers have suffered heavy losses

The bicycle industry is one of the best-performing industries in the UK. According to The Guardian, bicycle sales in the UK grew by 60% last year .

But since the UK and the EU reached a trade agreement at the end of 2020 , many retailers have been worried about the development of the bicycle industry. In response to new import and export regulations, the bicycle boom may slow down. High tariffs and cumbersome procedures are about to overwhelm the British bicycle industry.

Parts come from all over the world, and rules of origin are difficult to enforce

Although bicycles were manufactured in the UK, many were imported from the Far East, with most bicycle parts coming from Asia , Europe and America.

Even if a bike is assembled in the UK, it must contain at least 70% British materials and parts to be classed as a British bike under the terms of the UK-EU trade deal .

If a bicycle does not meet this threshold, then when it is sold into the EU it is subject to a 14% tariff or 4% for frames , with some tariffs going up to 45% . Products entering the UK from Europe that do not meet the European origin percentage requirements are also subject to these tariffs.

If the frame is made in Asia and uses parts from manufacturers such as Shimano and Sram (which do not come from the UK or EU), it will be almost impossible to achieve the percentage required by the trade agreement .

Less than £135 need to register for UK VAT

For online retailers, the situation will be further complicated. From January 1, VAT will be collected at the point of sale rather than at the point of import .

This means that overseas retailers shipping goods into the UK will need to register for UK VAT and report this to HM Revenue and Customs (HMRC) if the value of sales is less than €150 (£135).

It is reported that the new VAT rules have hit some bicycle brands in the UK . Bicycle brand Ribble has exempted European customers who purchased bicycles between January 1 and 17 this year from the 14% tariff. However, the company has now clarified the prices on its website and shows the additional charges that EU customers will face.

A large number of British bicycle retailers suffered heavy losses

Gloucester bike brand Quella said it could lose 30 per cent of its sales this year. Because frames and components are made in China and Taiwan, every sale is subject to a 14 per cent tariff, with a maximum of 45 per cent.

Steve Grimwood, owner of Ipswich-based bicycle retailer Elmy Cycles , said Brexit was affecting the entire industry. Some of his European suppliers, such as Bianchi and Ridley, had either suspended shipments to the UK or increased prices by 5% to 10%.

Another European supplier, the Dutch bicycle company, decided to stop selling to the UK earlier this year and sell its products to other countries around the world except the UK .

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