04/01/2021 - 2021 Shipping, Post Brexit

Happy New Year! If you got a few days off over the last week, I hope it was enjoyable. Now the UK has left the EU and a trade deal has been reached, I wanted to let everyone know what our understanding is at the current moment.

Cotic JEHT

The UK Situation

For UK customers it's effectively business as usual, and we will be building and shipping whatever we have in stock as soon as possible for you. For those enormously patient hardtail frame customers, what I can confirm is that the frames are due into port in the UK on 23rd January. They are in a container, on a boat, right now. What I don't know is how long it will take to clear them through customs, and I suspect it will take longer than the usual 4-5 working days. As always, your patience is appreciated, and if you feel you can't wait any longer then cancellation with full refund is always an option. These are unprecedented times, and peoples' situations change quickly. We will never hold you to an order you made months ago if it doesn't suit anymore.

EU Exports

Despite the trade deal having been signed between the UK and the EU, there is still some lack of clarity on the charging of import duty for certain Cotic product lines. However, some things we know:

At the moment we are clear that UK made frames (so that is currently RocketMAX and Rocket) attract Zero duty when shipped to the EU.

All purchases made by EU customers are now charged without 20% UK VAT, and they will attract VAT in the country of delivery which will be payable by the customer to the courier when it arrives. This will apply even if you ordered before 31st December 2020 and paid a deposit. Don't worry, deposits don't attract VAT, so you won't end up over paying any taxes if you have a deposit with us. If you paid in full, this also leaves you unaffected because completed transactions made prior to 31st December 2020 are to remain under the previous rules.

This situation will persist for 6 months whilst the new EU/UK VAT collection system is put in place.

The unclear situation is with Taiwan produced frames, and possibly complete bikes using Taiwan made frames. The Zero duty situation is for goods that are "UK Origin" or have a significant proportion of UK 'value add'. For the UK made frames they easily meet these requirements because they are more than 70% UK made or processed by value.

What we are currently trying to ascertain is whether our EU customers who have bought Taiwan produced frames or bikes assembled using the majority of Taiwan sourced parts might need to pay some import duty. This is because the rules regarding items being of "UK origin" are a bit unclear, and the 'value add' by Cotic possibly doesn't add up to a significant enough percentage of the value of the end product supplied to qualify for zero rating. I am currently going through the full trade agreement to try and figure it out, and we are in touch with our industry body to get to the bottom of this.

The upshot of all this is that for this week at least and maybe longer, and until we know exactly what the duty situation is, we are not shipping anything to customers in the EU. We want to give ourselves time to understand and apply the new rules correctly, and then be able to explain them to customers. There will be increases in shipping prices as well due to the couriers having to clear products through customs now, so once we have all the costs understood, we will be in touch to agree any cost increases with you.

If you have an order placed already, but don't wish to pay the extra fees, then we will cancel and refund. No problem at all. At the very least, we will do everything we can to look after you whether you want to complete the order or not.

What I really want to stress is that as soon as we have a firm operating procedure and pricing for our friends in the EU, we will start shipping again, but in the meantime you are more than welcome to place provisional orders with us so you can make sure you have a place in the queue for our upcoming deliveries.

RocketMAX gen3

Rest Of The World Exports

If you've got this far, well done! For our customers outside the UK and EU, it is business as usual and we are looking forward to hearing from you.

Production/Supply Outlook

Longer term, we are still facing demand like we have never known, as is the whole rest of the industry. As a result I have placed forward orders for our frames and parts for bicycles up to the end of 2021, and in some cases into 2022. Lead times on some parts like grips and saddles is now pushing out to over a year, so whilst we have good stock now and for the medium term, through the middle of the year I would expect us to have to make some substitutions to keep bikes going out you. It is here that the strength of our decision to assemble bikes in the UK really makes a difference. We can discuss these options with you if some parts stock is dwindling, or we can leave some items off the bike and give you a discount as a result. We have done this throughout 2020 and will continue to do this where we need to in 2021 to make sure we get you your new Cotic as soon as we can manage.

I'll be in touch again soon once we know more.

Cheers, Cy

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