With Brexit complete, people now face its effects
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The United Kingdom officially left the European Union’s single market and customs union on Dec. 31, making Brexit a full reality.
“This is an amazing moment for this country,” said Boris Johnson, UK Prime Minister, in a New Year’s message. “We have our freedom in our hands, and it is up to us to make the most of it.”
The four-year-long process which started with a slim majority vote in 2016 finally came to an end as Europe rang in the new year. The economic trade deal made in December was meant to create a smooth transition when the UK left the trade union, however the effects of Brexit are being felt by businesses in many aspects.
One of the big issues is whether goods sold by retailers into Europe are subject to tariffs.
Under the Brexit deal a product will attract tariffs if more than 40% of its pre-finished value is neither of British nor EU origin, from Japan, for example. Big retailers will take time to calculate their exposure to tariffs and some have suspended all sales to the EU while they work out their new cost base.
The cost of new paperwork, including customs declarations required on goods being traded in both directions, is another consideration, as is the £150-a-time health certificate require on all consignments of food.
Dutch bike company ‘stops dealing with British customers’
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
EU firms refuse UK deliveries over Brexit tax changes
Some EU specialist online retailers have said they will no longer deliver to the UK because of tax changes which came into force on 1 January.
Bicycle part firm Dutch Bike Bits said from now on, 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.
Another firm, Belgium-based Beer On Web, said it was now shunning the UK “due to the new Brexit measures”.
The companies are angry because they now face higher costs and increased bureaucracy in order to comply with UK tax authorities.