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It ain’t gone, you know. It just faded into the background for a while, displaced by the Covid-19 pandemic.
But this week’s events in London and Brussels have brought the stark reality of Brexit back into the spotlight.
The extraordinary strategy adopted by the Boris Johnson government has, at best, scared and at worst scared Irish companies.
“This is not a drill,” Tánaiste Leo Vardakar told Morning Ireland during the week, as he implored companies of all sizes to act now to prepare for January 1.
So if you own or run a business, what should you do now to prepare?
1 – EORI number
If your business is going to trade with companies or organizations in the mainland UK (this does not apply to Northern Ireland) after January 1st, one way or another you will need an EORI number.
This is a tax reference number issued by the Tax Customs. If you don’t have one, the procedure to obtain it is simple. Go online to Revenue’s ROS website and fill out the online form. You should issue your number very quickly, and certainly within three days.
More information is available at www.revenue.ie/brexit and in the coming days, Revenue will be in contact with up to 90,000 businesses it expects to be affected by Brexit to help them prepare.
You can also apply for a UK EORI if you are responsible for UK import / export declarations. You can get one by registering with HMRC.
2 – Customs
No matter what happens to the Brexit negotiations between the EU and the UK over the next few weeks, Ireland-based companies operating in and out of the UK after January 1 will face customs returns and other paperwork. bureaucratic.
You may decide to handle this yourself internally, and if so, the government’s recently announced grant of € 9,000 to help pay for the cost of hiring or reassigning someone to a customs post could help. However, if you want to hire someone outside of your company, you may find it difficult to find someone, as there is a huge shortage of dispatch agents here, with an estimated 2,000 needed.
“Talk to your freight forwarders, talk to freight forwarders, and get someone to act on your behalf to help get products in and out of the country,” said Carol Lynch, partner, Customs and International Trade at BDO.
There is also a ton of customs training available for free right now. Skillnet is about to launch a free online training course for 2,500 people and Enterprise Ireland has one too. While Chartered Accountants Ireland will have a course from October.
3 – Logistics
It is really important that you communicate with your suppliers and logistics providers about the continuity of the goods and services you need for trade. Make sure anyone you are working with in the UK knows that free trade declarations are required and let them know where along the route the customs declarations will be required.
“Have that conversation now, develop the supply chain, see where the UK is touching, where you need to enter and leave the UK, with the end result that you will not have a delay with your customer,” said Cróna Clohisey, Head of Chartered Accountant’s Ireland public policies.
4 – Land Bridge
If you use providers outside the UK you should also check if they use the UK as a land bridge. If so, find out if this will cost and cause delays. The UK has adhered to the Common Travel Convention, which means that if you ship goods through the UK, there will be no delays.
However, recent reports have suggested that there could be chaos in British ports on January 1, with huge delays affecting the speed of transit.
“It is very positive that they have adhered to the convention, and that will mean that the merchandise can be shipped through the UK without having to be checked, or without having to be stopped,” said Cróna Clohisey.
“But there is additional paperwork that must be completed to do that.”
5 – Rates
If no free trade agreement is reached between the UK and the EU, tariffs will apply. Therefore, companies must classify the goods they import or export for customs duties and know their origin.
They must also calculate how much the fees will be, which is not a simple process.
“That’s probably the trickiest part of the habit,” Carol Lynch said. The six-digit code of the World Trade Organization will depend on the sub-category to which your product belongs and the amount of customs duties that apply from there. The point of origin is also important because the rate that applies depends on its origin.
For example, if you are marketing a raw material that undergoes processing before it is turned into something else, what counts is where the raw material and processing takes place.
6 – Finance
The new customs duties will inevitably lead to additional costs, not only for the duties and VAT that must be paid immediately on import, but also the price of managing it all.
“You will have to pay customs duties if there is no trade agreement, so where are you going to get the credit?” Chrona Clohisey asked.
There are government supports available to help with this, such as the Brexit Loan Scheme or the small business loans available from Microfinance Ireland.
Larger merchants can use a deferred payment account that allows them to postpone paying customs duties for a month. But overall, cash flow will be important and also challenging, especially for smaller businesses.
7 – Currency
If you are already trading with the UK, you have undoubtedly noticed the recent drop in the value of the British pound. Currency fluctuations can pose a great risk to those involved in international trade, so you may want some advice on how to mitigate them.
“Based on the feedback we receive from companies, many companies have already acted in this regard,” said Giles O’Neill, head of Enterprise Ireland’s Brexit Unit.
“But I think they will now have another look, based on current currency movements.”
Hedging is an option, but banks and other financial advisers may have other suggestions.
8 – Who is the registered importer / exporter?
According to Carol Lynch, it’s important for companies here to talk to their customers and suppliers and find out who is acting as a registered importer and who is acting as a registered exporter.
“If you are an Irish company selling in the UK, there is a lot of pressure on Irish companies to act as importers in the UK,” he said.
“Similarly, if you have a supplier that sells to you from the UK, you need to clear customs, be registered for VAT, etc. if you are acting as an importer.”
So get in touch with everyone involved and make sure you have it all figured out before January 1.
9 – Licensing / certification
It is important that you check if your current certifications, licenses or authorizations will be valid after Brexit. The EU has its own quality certification systems and, until now, many EU companies have used UK bodies to authorize their products and claim they meet EU standards.
“Obviously they can’t do that now,” said Cróna Clohisey.
“So basically you need to get another source. They are called notified bodies. You may need to transfer your certificate to another member state.”
If you don’t, you may suddenly find that your product no longer technically meets EU standards, and therefore can no longer be marketed within the EU.
10 – Supports
There are many government resources and supports available to help you with all of this. Financial assistance is available through the Credit Guarantee Program, the Brexit Loan Program, and Microfinance Ireland loans.
So far, uptake of the Brexit loan program has been low enough, with just € 56 million out of the € 300 million available. Enterprise Ireland also offers a range of different grants for customs, consulting and other uses.
The Irish Department for Business and Business also has an important set of resources available on their websites and the Local Business Offices will also help, including with tutoring. Intertrade Ireland also has a range of planning and implementation vouchers available.
Ultimately, however, it appears that good communication will be key for businesses to prepare.
“Talking to your customer from the UK, understanding what they think they should be doing or are willing to do or could be doing, those conversations need to take place so that you don’t come to January and say, ‘oh, I thought I was doing that.’ said Giles O’Neill.
This week EI will launch a Brexit readiness checker to help people assess their readiness and steer them towards supports.
Because, now there is no doubt that Brexit is coming.
The question is, is your company prepared for what it may bring?
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