The fallout: Unexpected challenges for business in Brexit Britain

New border rules introduced after the UK’s departure from the European Union are creating unexpected issues. Some EU businesses have stopped posting to the UK, British expats can’t access Sky TV in Europe, while Sainsbury’s has started selling a rival grocer’s products on its shelves in Northern Ireland. Even Percy Pig has been hit by Brexit. Here are some of the curious challenges caused by the UK-EU divorce: Some smaller EU businesses including a Dutch bike firm have given up selling their products to the UK due to complicated changes in Value Added Tax (VAT) rules. On January 1, the UK changed the rules for foreign mail-order sellers, requiring them to collect the sales tax on behalf of the government. They are then required to repay the money to HM Revenue & Customs. The government could have applied existing VAT rules to EU sellers because goods arriving from outside the bloc were already subject to the rules. But the sheer volume of goods entering the UK from the EU meant officials did not have enough staff to police the changes Some EU traders have already stopped delivering to the UK because of the red tape. Bicycle parts firm Dutch Bike Bits said it would ship to every country in the world except the UK. "We are forced by British policy to stop dealing with British customers," it said on its website. Didriksons, a Swedish coat maker, delayed orders under the impression that Brexit “imposes a customs duty on all trade to and from the UK”. Parcels being delivered to the EU have also been affected. Parcel giant DPD UK said it had temporarily stopped delivering packages to the EU because of the “increased burden” of customs paperwork. DPD said 20 per cent of parcels had "incorrect or incomplete data attached", which meant they would have to be returned. Percy Pig could also be hit with tariffs if Marks & Spencer re-exports the popular British sweet to EU countries, including Ireland. M&S chief Steve Rowe said the iconic treat was subject to very complex “rules of origin” regulations that form part of the trade deal. The rules relate to the composition of individual products and how much of it has been altered in the UK. Any product that is manufactured in Europe, imported into the UK and then re-distributed to EU countries faces a tariff. Re-exporting is rare for other countries which have trade deals with the EU - such as Canada and Japan - due to their distance from the market. "The best example I can give you of that is Percy Pig," Mr Rowe told reporters. "Percy Pig is actually manufactured in Germany. If it comes to the UK and we then send it to Ireland, in theory it would have some tax on it.” Scottish fishermen have halted exports to the EU after the system that put fresh langoustines and scallops in French shops just over a day after they were harvested broke down. The introduction of health certificates, customs declarations and other paperwork added days to delivery times and hundreds of pounds to the cost of each load. Business owners said they tried to send small deliveries to France and Spain to test the new systems this week but it was taking five hours to secure a health certificate in Scotland. "Our customers are pulling out," Santiago Buesa of SB Fish said. "We are a fresh product and the customers expect to have it fresh, so they're not buying. It's a catastrophe." Most UK bank accounts held by expats in the EU will close after the end of ‘passporting’ arrangements. The UK’s membership of the bloc meant banks were allowed to provide services in member states without the need for approval. From January 1, British banks needed authorisation from each country they chose to operate in. The web of regulations forced many banks to close accounts in countries where they no longer wanted to operate. Britons who travel to the EU can no longer stream their favourite shows after the UK left the bloc’s single digital market. Previously, UK subscribers to services such as Amazon Prime and Sky TV could stream from anywhere on the continent. Nearly €6 billion ($7.3 billion) of EU share dealing shifted out of London on the first trading day of 2021. Investors and banks had previously used the UK’s membership of the bloc to trade freely across borders. The shift came after the UK’s regulatory system was not recognised as the “equivalent” to the EU’s in post-Brexit trade deal. As a result, European trading moved to other centres such as Amsterdam and Paris. Boris Johnson admitted that his deal fell short on provisions for the City. He said his deal “perhaps does not go as far as we would like” on the government’s ambitions for financial services. UK travellers are no longer exempt from the EU’s coronavirus border restrictions. The bloc only allows traveller entry from a handful of non-EU countries that have low rates of the virus - including Singapore, China and Australia. On January 1, more than a dozen Britons were refused entry to the Netherlands because of the rule change. Several British citizens living in Spain were barred from boarding flights in the UK because the airline said their pre-Brexit residency papers were no longer valid. Others were also refused entry to Germany. British supermarket Sainsbury’s was forced to stock food products from rival supermarket Spar due to border disruption. On January 1, England, Scotland and Wales left the EU's single market for goods but Northern Ireland did not. A customs border in the Irish Sea means additional checks are required on goods moving from Great Britain to Northern Ireland. Sainsbury’s said some products were “temporarily unavailable for our customers in Northern Ireland while border arrangements are confirmed”.

The fallout: Unexpected challenges for business in Brexit Britain

Percy Pig, Sky TV and fish all hit by issues in first week of trading with EU