Does the item, which the Spanish buyer claims not to have received, show as delivered on the Royal Mail website? If not, then you will have to refund them if they open a case.
Contact Ebay Customer services again and ask them to update the tracking.
https://www.ebay.co.uk/help/eua?id=5275&mkevt=1&mkpid
I don't know why you were expected to use UPS. If you are prepared to sell overseas and want to use your own postage, it's best to add that service to the items when you list them.
You won't get the money you paid to post back. Did you try to cancel the UPS labels? Ebay may eventually refund for them as they were not used, but, if the buyers paid for the labels and the money went direct to Ebay rather than through your account, I think Ebay will refund the buyers as they paid for the postage.
"There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true.”
Søren Kierkegaard, Danish philosopher (1813 - 1855)