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szdaily -> World Economy -> 
UK businesses drowning in red tape under Brexit border rules
    2021-01-13  08:53    Shenzhen Daily

WHILE the mile-long lines of trucks have dissipated at ports, U.K. businesses are waking up to less visible forms of friction at the border with the European Union (EU) that may cause more enduring damage.

From health certificates to new taxes and additional paperwork, the cost of moving goods across the English Channel is rising due to Britain’s exit from the EU. Just 6 percent of firms told the Bank of England they were fully prepared for what was to come, and the headaches are just starting less than two weeks into the new system.

While each one of the new rules marks a minor shift from the border-free trade Britain enjoyed for four decades as a member of the EU, together they add up to a significant constraint. That’s already starting to upend supply lines and limit shipments for companies of all size. Those hit hardest are the United Kingdom’s 5.9 million small- and medium-sized businesses, which employ about three-in-five of those working in the private sector.

“There’s so much complexity,” said Adam Marshall, director general of the British Chambers of Commerce. “It’s like an onion — the more you peel, the more you cry.”

British firms must show where their goods were made — and where the components in those products come from — to determine whether they must pay value-added tax when resold into the EU. Those regulations don’t exist for trade within the EU, making the old system far simpler.

Confusion about the rules has already prompted complaints from big-name retailers such as Marks & Spencer Group Plc. Others have suspended sales to the EU. Debenhams temporarily switched off its Irish e-commerce site, while John Lewis Partnership, Asos, and Fortnum & Mason stopped deliveries to Ireland.

British exporters must register to pay value-added tax in EU nations. That is prompting a number of companies to halt their cross-border trade, said Stuart Lisle, chair of the Brexit task force at professional services firm BDO.(SD-Agencies)

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