Thursday 7 January 2021 2:37 pm

Debenhams shuts Irish website as Brexit 'rule of origin' clause leaves businesses blindsided

Debenhams has shut its online business in Ireland as it is unable to send orders to the Republic of Ireland due to new Brexit trade rules. 

The business, which is in administration, said the website was “temporarily closed” but gave no details on if and when it would be back online.

The website apologised to customers in the Republic of Ireland, saying: “We are currently unable to deliver orders to the Republic of Ireland, due to uncertainty around post-Brexit trade rules. We have therefore made the difficult decision to temporarily switch off”

According to the BBC retailer John Lewis has also scrapped overseas deliveries.

Rule of origin

There has been confusion surrounding the Brexit deal “rule of origin” clause that has led some UK businesses’ to suspend sales to consumers in the EU post-transition period.

Under the “rule of origin” clause, which was included in the Brexit deal, goods made or containing components made outside the UK or EU and resold by UK businesses to the EU are now subject to VAT and import duties.

The likes of car, clothing and technology manufacturers will be affected.

According to accountancy group UHY Hacker Young some businesses have suspended sales to customers in the EU as they try to establish whether import duty is due or if they can switch to UK or EU components.

Michelle Dale, senior manager at UHY Hacker Young, said: “It is clear that many UK businesses exporting to the EU are going to be hit by tariffs.

“Businesses have also been completely blindsided by the ‘rule of origin’ part of the deal, which leaves them at a major competitive disadvantage when selling in the EU. Unfortunately, not enough was done to prepare them for this.”

The British Retail Consortium (BRC) said at least 50 of its members have been impacted by the rules.

BRC trade policy adviser William Bain said: “As the commercial impact of the Trade and Co-operation Agreement (TCA) has sunk in for retailers since Christmas Eve, at least 50 of our members face potential tariffs for re-exporting goods to the EU.

“We appreciate that the rules of origin in the TCA were designed to be facilitative on trade in goods, but we need a solution which genuinely reflects the needs of UK-EU supply and distribution chains for goods.”

City A.M. has contacted Debenhams for comment.