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BUSINESS

Extra costs, more paperwork: ‘Post-Brexit rules are nightmare for small businesses in France like mine’

Even large corporations are finding the post-Brexit import rules a challenge, but for small firms like this husband-and-wife company in Paris the problems seem overwhelming.

Extra costs, more paperwork: 'Post-Brexit rules are nightmare for small businesses in France like mine'
Ian Benton and Alison Ross run La Chambre Paris. Photo: Ian Benton

Ian Benton and his wife Alison Ross run La Chambre Paris, an e-commerce site which sells high quality and responsibly sourced bed linen for an affordable price.

They initially launched it aimed at the French market, but found they were also getting a significant slice of custom from the UK in the 18 months since the company launched.

Ian, who is British, said: “Like most businesses we were waiting to see what was going to happen with the negotiations before trying to understand the impact for us.

“The deal that was signed is better than a no-deal scenario but it is becoming very clear but it is becoming very clear that the impact of leaving the EU is only just starting to be understood by businesses and the government

“The headlines of achieving a Tariff Free / Free Trade Deal does not reflect the true impact on all businesses of the UK's decision to leave the EU. This is not going to be fully understood for a number of months.”

Once the deal between the UK and the EU was signed on December 24th, businesses were left to figure out the details ahead of the new rules coming into force on December 31st.

For Ian and Alison the major headaches are around two areas – VAT and shipping costs.

As they are not selling food products they have been spared the strict new regulations on certain food types, but do have to contend with other issues. 

READ ALSO Bovril, tea and ham sandwiches – what can you bring from the UK into the EU?

They are spared import tariffs and believe that the rules of origin requirements will also be minimal, since all the company's products are made at an eco-responsible factory in Portugal.

Ian said: “The impact of Brexit is for us hidden in the details and the complexity it creates. For us it is going to create multiple ongoing problems and costs if we want to keep shipping into or out of the UK.”

VAT

Previously, businesses registered in the EU paid any VAT that was owed in the UK via the joint EU system, but now any business that provides sales or services in the UK must register for a British VAT number.

This applies to companies that deliver goods to the UK but also those – like The Local – which provide services.

 

But registration is only the start, businesses then enter a complicated set of rules which vary depending on whether the sale is worth more or less than €135.

For Ian, his business covers both sides of this divide.

He said: “We have not been able to ship our orders to the UK yet because we have not received our UK VAT number. This is going to take 30 days so in the meantime we are keeping our customers up to date with what is happening and they are being patient which we really appreciate.

“Once we get the number we then have to do quarterly VAT returns in the UK.

“For orders under €135 we have to collect VAT on them at the time or purchase but for orders of more than €135 we are not supposed to collect the VAT, which means customers could receive extra charges for VAT on delivery.”

Shipping

The other major factor that affects Ian's business is the cost of delivery.

Since Brexit there are extra regulations and restrictions in place for people sending mail between the UK and the EU, and these also apply to businesses.

READ ALSO The new rules on sending parcels between France and the UK

Ian said: “Our shipping costs to the UK are roughly €8 – €14 per package but we will have to add an additional €4.90 for each package that will pay the customs processing by our logistics provider – in this case Colissimo International.  On an order of less than €135 these costs are significant.

“We were offering free shipping the UK before Brexit (as a trial) but we now cannot afford to keep doing that as the additional costs are too expensive.

“For any business that is selling low priced products these additional costs will make shipping to the UK unprofitable.

“For orders of more than €135 we will have an additional processing cost of €16.90 per order that we have to pay to our logistics providers (Parcelforce) for them to manage the customs clearance and the process of collecting the VAT from customers when they deliver the products in the UK.

“This additional cost will either have to be passed on to our customers or we will have to take a large impact on our margins which most likely would not be sustainable.”

Future

For now, Ian and Alison will continue shipping to the UK, but many other businesses have stopped deliveries between the UK and EU, on either a temporary or permanent basis. As well as small businesses this includes big names like John Lewis and Fortnum & Mason.

Ian said: “Right now we are going to have to adjust our shipping rates as we cannot take on all of the costs that have resulted in the red tape that Brexit is creating.

“We will try to keep shipping if only to test the system and see what happens to each order / what we really get charged / how it works for our UK customers when they receive the packages etc. Is it feasible in the long term? Well, only time will tell.”  

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BREXIT

Is new court ruling the end for Britons fighting to remain EU citizens?

The Court of Justice of the European Union confirmed on Thursday that Brexit really does mean that Britons are no longer EU citizens. Claudia Delpero looks at whether there's any other way they can keep their rights.

Is new court ruling the end for Britons fighting to remain EU citizens?

The Court of Justice of the European Union confirmed on Thursday that Britons lost EU citizenship when the UK left the EU, on 1st February 2020. 

It is the first time the EU’s top court has rules on the matter, after a number of legal cases challenged this specific Brexit outcome. The decision also sets a precedent should other countries decide to leave the bloc in the future. 

What has the EU Court decided?

The Court of Justice decided on a case brought by a British woman living in France.

Before Brexit, she could vote and stand as a candidate in her town of residence, Thoux. But after the UK withdrawal from the EU, she was removed from the electoral roll and excluded from the municipal elections that took place in March 2020, during the transition period.  

As the mayor refused her appeal to restore the registration, she took the case to the regional court in Auch, which agreed to request an interpretation of the rules to the EU top court. 

Julien Fouchet, the barrister supporting her and several other cases on the EU citizenship of British nationals, argued that the loss of EU citizenship and voting rights was disproportionate. It would also be contrary to the EU Charter of Fundamental Rights, given that the woman also lost her voting rights in the UK, having lived abroad for more than 15 years.

Alice Bouillez, who has lived in France since 1984 and is married to a French national, could have applied for French citizenship, but did not do so because she said “this was not necessary” before Brexit and, as a former UK official, she had taken an oath of allegiance to the Queen.

On Thursday the Court of Justice announced the decision about her case. The court ruled that the “possession of the nationality of a member state is an essential condition for a person to be able to acquire and retain the status of citizen of the Union and to benefit fully from the rights attaching to that status.”

The court therefore confirmed that British nationals automatically lost their EU citizenship as a result of Brexit and, as a consequence, Britons also lost their voting and electoral rights in municipal elections in the EU (unless the country where they live set different rules). 

What is EU citizenship?

EU citizenship was introduced by the Treaty of Maastricht of 1992, when borders were opening and the bloc was integrating economically after the end of the Cold War. 

Under the treaty, every person holding the nationality of an EU member state is a citizen of the Union. EU citizenship is additional and does not replace nationality, the treaty specifies. But this creates the first form of a transnational citizenship that grants rights across borders.

EU citizens have the right to access each other’s territory, job market and services under the principle of non-discrimination. If they are economically active, they have the right to reside in other EU states and be joined by family members, access healthcare at the same conditions of nationals (for emergency treatment also when travelling temporarily), obtain social security benefits and see their professional qualifications recognised.

Beyond free movement, at the core of EU citizenship there are also political rights, such as participating in the European Parliament election, voting and standing as candidates in municipal elections when living in other EU countries, receiving consular protection from other EU states outside the EU, and taking part in European Citizens’ Initiatives asking to the EU to legislate on certain matters. 

Which EU citizenship rights have Britons lost with Brexit? 

For British citizens who were living in the EU before Brexit, the Withdrawal Agreement protects some of these rights. Britons covered by deal have their residence, access to work and education, healthcare, social security and qualifications secured, but only in the country where they were living before Brexit.

But the right to free movement in other EU states, consular protection in third countries, and the political rights attached to EU citizenship were lost, the Court confirmed. 

For British citizens in the UK, the trade and cooperation agreement has preserved some social security rights and, in theory, the possibility to have professional qualifications recognized when moving to an EU country. These provisions however lack details and may take a long time before they work in practice. 

As the “European Union” no longer features on British passports, the possibility to access EU lanes at airports to skip passport control queues has also vanished. 

“The loss of those treasured rights has been clear to those of us living in the EU from the early days of Brexit. But for Brits in the UK, the realities of life outside the EU, and the consequences of Brexit, are only just dawning. Long queues at the borders, roaming charges, obstacles to working abroad, etc. are the new reality,” said Sue Wilson, Chair of the group Remain in Spain. 

While she said the court’s decision was “no real surprise,” she argued that “this is not the Brexit the public were promised, or that the majority voted for.”

Can British citizens get some of these rights back?

Julien Fouchet was disappointed at the Court decision and promised to continue the legal fight, bringing the case at the European Court of Human Rights (which is not an EU institution). 

Other two cases on the matter of EU citizenship for British nationals are still pending at the Court of Justice of the EU. One of them aims to determine whether EU citizenship is a “fundamental status” that cannot be removed but Thursday’s decision could have already provided the answer.

Another option to reconsider some of the rights is the renegotiation of EU-UK trade agreement, when it will be reviewed in 2025. 

Meanwhile, the EU is revising the rules for non-EU citizens living in EU countries on a long-term basis, making it easier to move across borders. 

Applying for citizenship is so far the only option to regain voting rights, although not all EU countries allow dual nationality. 

Sue Wilson, who has long campaigned for the UK to stay in the EU, said: “There is only one way to restore the loss of our rights, and that’s to rejoin the single market, rejoin the customs union, and eventually, rejoin the European Union… Until that day, we will continue to be second class citizens whose rights have been diminished for the sake of an ideology.”

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