Business as unusual

By Kim Schiffmann, in News, Algarve, Business · 05-02-2021 01:00:00 · 10 Comments

It is no secret that the Algarve is one of the Brits favourite travel destination and year after year the UK has proven itself to be the most important tourist market for this region, so it is little wonder that Brexit has hit businesses in the Algarve especially hard.

The Algarve relies on not only UK tourism, but also on the expats that have settled here and who are part of the foundation that many businesses based their concept on. Now after Brexit a lot of companies are feeling the repercussions.

The Portugal News has contacted some of these businesses to see how they are doing just one month after the UK left the European Union.

We talked to John Scott the director of Algarve Removals, an international removals company that provides expats and secondary homeowners the availability to purchase and move items from the UK, Spain and Portugal.

Over the last ten years they have helped with 90,000 removals, but within the last month they have lost all of their business.

John told us about the effect Brexit had on moving used furniture and personal effects with no commercial value. He now has to go through impossible paperwork, his trips take double the time and the costs have risen massively. To transport anything into Portugal people will now have to pay 40 percent VAT and duty charges on entry plus UK and Portuguese customs clearance charges.

“People are treated like commercial value. If we move a family of four, living in a 3-4 bedroom house, they will have a general house contents value of around £25,000. Portugal wants 40 percent VAT and duty on the value, that is £10,000. We only charge £2,500 – £3,000 to do the delivery, that is nearly four times our cost. But now Portugal wants to charge VAT and duty on people’s used personal effects that they have already bought and paid VAT on,” said John Scott.

“This affects so many different people. Moving homes is just a small part of our business, with the online shopping we were moving 1,600 parcels a week. This is now paused until further notice and we are trying our best to resolve this and get the service back up and running. I think people living in Portugal should use local shops to boost the economy here, but for example there is this case where a lady has cancer, her chemo tablets will cost her £2,000 every month to get them delivered. She relies on me to bring it over and now I cannot offer that service anymore. And the firefighters in the Algarve, they rely on donations, so our fire brigade in the UK donate all of their used equipment to the bombeiros and we bring them over for free. This has cost our company thousands and thousands and I was prepared to do this again, because we had a thriving business. I can’t do that in the future. The Algarve relies on tourism and expats, and we are going to drive them away.” John said.

We also talked to Algarve Express, a company with a similar concept, where Rob Francis told us that their business has come to a standstill too, which causes frustrations not only for the company but also for their customers. “Let me give you an example of one of our business clients, they were getting frustrated with us for not shipping the pallets of food they had sent in to our warehouse despite the fact they did not have the necessary licenses in place. They decided to use another company who managed to bring them into Portugal but these goods are now impounded at a bonded warehouse in Lisbon at a cost of £500 per day. It is likely to take some time before their licenses are in place. They advised us that Infarmed cannot even start the process for at least 10 days! They are considering destroying their shipment.”

We asked Rob what would have to happen for the business to thrive again and he told us “firstly an amnesty from the EU / UK Government on the goods that we already hold in our warehouses that we have been trying to ship since 1 January to allow people to gear up for the documentation they are being asked for. Secondly a staggered introduction of the requirements and clear communication of any possible leniencies to the Customs Agents. However we get the general feeling the EU is saying you voted for this, you now deal with it.”

The official source of CTT claimed that “in the first month of Brexit there are no significant impacts on flows with the UK” at the same time admitted though that “postal items are now required to send information enabling them to be cleared through customs in the United Kingdom, either on paper or electronically.”
The situation is similar for items coming from the UK to Portugal although in both cases items containing only documents are exempt from the change in acceptance procedures.

The same source told The Portugal News that “orders containing goods now have to undergo a customs procedure that did not exist before Brexit. Shippers who comply with the new customs information requirements do not experience any major delays with this process, but customers who do not accompany their shipments with the information required by UK customs see extended transit times.”

When asked about additional costs or fees for the dispatch of mail and items, CTT confirmed what Algarve Removals and Algarve Express have told us before. “For international shipments to the UK, postal items containing goods are now subject to VAT, customs filing fee and duty, where applicable. In the case of purchases of goods in the United Kingdom, these will continue to be exempt from charges if they are worth less than €22 (including postage)”, but added that “In the case of mail products, the tax zone where the United Kingdom is located is in Europe and there is no price distinction between EU and non-EU Europe. Brexit has therefore not changed the prices of mail items applicable to the UK and is not expected to have implications for this destination.”

The Portugal News contacted the British embassy in Lisbon for some clarification, where the spokesperson said that they “are aware of some concerns in this respect” but admitted they themselves are still “actively seeking clarification from the Portuguese authorities.”
“We are monitoring closely the implementation of the Trade and Cooperation Agreement signed between UK and EU, and remain committed to minimising the impact of this agreement on people and businesses, and preventing disruption to the normal flow of goods and services between our countries.”

The same source ultimately also advises “anyone/any business that feels affected to also seek clarification of their doubts from the relevant Portuguese authorities, ie Autoridade Tributária (tax and customs), the Economy Ministry or the Foreign Ministry.”
So while CTT appears to not be overly concerned by the recent changes and further need of clarification, companies like Algarve Removals and Algarve Express are struggling to stay afloat and their work is now anything but business as usual.

You may also find useful information from the UK government here “Trade with the UK as a business based in the EU”.

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Of course the elephant in the room is Portugal is very much a socialist country.
It wasn't when I moved here.
The problem with socialism is they are very good at spending other people's money,so bear that in mind if wanting to move here

By James from Algarve on 10-02-2021 04:35

Talk of leaving Portugal is of no point, the EU dictate what member countries must do and it seems Spain is being tougher still on Brits in particular - its an attitude of “you wanted to go you deal with it” - which was on the cards from the off - I never wanted to leave I wanted us to use our veto like De Gaul did when we wanted to join - by all means have freedom of movement and trade but not The United States of Europe with Laws from the centre - it cant work long term with such diverse economies its gradually imploding - the Dream of Germany to create a Political union, sucked up to by France, needed others to complain and object and join the UK to go back to EEC roots do you remember what tge letter mean? - Britain throwing its toys out the pram and leaving a club after 40 years membership and contribution was crazy based on lies and false information and a minute fraction of the population not a decisive vote by any means and not “the will of the people” - such a small percentage win could have been affected by the weather!!! - wheres Farage now? - others need to threaten to join the UK action - curb the Political Union engage free trade and movement - Britain would return - never mind your shopping you wait till we need a 500€ visa for each country!!!

By Dick Smith from Algarve on 09-02-2021 10:48

Is Portugal's government desperate to destroy all of what's left in terms of Portuguese economy? Nevermind the pandemic, that's transitory. But if Portugal loses its appeal as a potential retirement locale for UK citizens it is all downhill from here on out. The UK has 6x the population than Portugal and Brits have established for decades as expats in Portugal. Businesses have started, real estate sales have been booming. Buddy Costa, you better get your house in order. This is complete nonsense!

By Paula from Algarve on 05-02-2021 05:55

I used to order food from ASDA and Sainsbury’s because even with the shipping costs it was far cheaper. Much of the food was to donate to the charity Families in Need. I still support the charity, but the food is now a lot less. Perhaps they could waive the tax and additional paperwork, if it was labelled “Charity” and collected by a charity representative. I’m sure I would not be the only one doing this.

By Norman from Algarve on 05-02-2021 05:01

I frequently used Direct Transport to buy from ASDA and Sainsbury’s because even with shipping costs, I could buy far more food for my money. A good proportion of these orders were destined for donation to the charity Families in Need. Although I will continue to support the charity, the amount of food I can donate is now a lot less.

By Norman from Algarve on 05-02-2021 04:07

Dear Portugal online,I’m having difficulty with passports going back to England for renewal ,there wasn’t any problems with the passports being done,they were posted back to us on the 4 January but still we haven’t received them,even though they were registered post ,does this mean that we may never get them as tracking says they are in Lisbon surely being private documents we should have received by now,there was never a problem with registered post before so why now? Regards Mrs jefcoate

By Kathleen jefcoate from Beiras on 05-02-2021 03:24

If I’m reading this right, we will be heavily taxed on household and personal items we would bring with us when we retire in 2021?
How does that encourage us to relocate in Portugal ?

By Edward Newins Jr from USA on 05-02-2021 02:17

For some reason the CTT don't care. They were always a first class postal service but now everything (from or to the UK) has simply slowed down to a crawl. I had a small parcel sent from the UK, with tracking, and it started its journey on the 9th January, and stopped at LANGLEY HWDC (wherever that is) until 2nd February. Its now in Lisbon where it seems to have stopped yet again. Don't bother asking CTT where the parcel is, they don't reply.

By James from Algarve on 05-02-2021 12:30

Are these extras charges being imposed directly by Portugal, or are they being imposed under the instructions of the E.U?
If they are being imposed by the E.U. surely it would be beneficial to leave the E.U and for Portugal; to set its own trade deals. Alternatively, the extras are imposed directly by Portugal then they are "Shooting Themselves in the Foot"
Ex UK, relocated for retirement to Portugal in 2017 after 20 years in South Africa. Having many friends, once able to, from both UK and SA who are looking to relocate. These extra charges will force them to Spain or the Adriatic

By Ian from Other on 05-02-2021 11:07

This is an unmitigated disaster.It will massively impact the quality of life of those expats living in Portugal.Imports are now subject not only to further delays but huge increases in costs of getting items that are simply unavailable in Portugal.
Small businesses will be wiped out as their products are simply uncompetitive.
I already had huge difficulties in the past being able to get hold of prescription medication in Portugal for my sick mother.
£22 value is a joke should be upped to £500 like in Australia.
The import of personal items and household goods should not be subject to any taxation.That is simply theft.
If Portugal actually cares about it's UK expat population then it needs to take action.Talk is cheap.
Come on Portugal you are letting us down and we can move.

By James from Algarve on 05-02-2021 09:51
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