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01 October 2020

Brexit: Time to turn Concern into Action

While the economic and social chaos caused by Covid-19 has left few aspects of life unaffected, one thing that has not changed is the date on which the Brexit transition period will end. With the 31 December 2020 now only weeks away, it is vital that businesses prepare for the inevitable disruption and changes that lie ahead.

Much like Covid-19, the economic impact of Brexit will not be felt evenly by all businesses. However, while the agri-food sector, fisheries, manufacturing and retail sectors will be most affected, almost no business will remain untouched.


Moving goods to, from or through Great Britain

It remains to be seen what, if any, trade deal will emerge from the negotiations between the EU and the UK. However, under the Protocol on Northern Ireland, no new checks or controls will apply to goods moving between the Republic of Ireland and Northern Ireland in either direction and goods from Northern Ireland will have free and open access to the EU Single Market.

Otherwise, regardless of size, all Irish businesses who move goods to, from or through Great Britain will face a range of new customs formalities and checks as well as potential duties and tariffs.

VAT will also be due on goods imported into Ireland from the UK (with the exception of Northern Ireland).

Businesses moving goods through the UK landbridge will need to complete additional documentation and provide a financial guarantee in order to avoid full customs import and export formalities on entry and exit.


Brexit Readiness Action Plan

In September 2020, the Irish Government launched a Brexit Readiness Action Plan. Measures being taken to support business include:

  • A Customs Roll-On Roll-Off Service (which will facilitate just-in-time business models),
  • Authorised Economic Operator Status (which allows traders to enjoy certain customs related benefits throughout the EU),
  • Potential deferral of import duties until the month following import, and
  • Proposed introduction of deferred VAT accounting.

However, the plan also highlights the need for businesses to help themselves by finalising their contingency planning and taking preparatory action.

So, what actions must business take to prepare?


Preparing for the end of the Brexit Transition Period – Six Key Steps for Irish businesses trading with the UK
  1. Register for an EORI number: An EORI (Economic Operators Registration Identification) number is a tax reference number available from Revenue which is essential for all Irish businesses which intend to trade between Ireland and the UK post 31 December 2020.
  2. Utilise available supports: These include:
    • Enterprise Ireland’s “Ready for Customs” grant which allows businesses to claim up to €9,000 for each eligible employee hired/ redeployed to a dedicated customs role. Enterprise Ireland also provide a range of financial planning supports, notably the Act On Initiative and Be Prepared Grant, Strategic Consultancy, Market Discovery Fund and the Agile and Operational Excellence Offer.
    • Skillnet Ireland’s free customs training, Clear Customs Online 2020;
    • InterTrade Ireland’s advisory services and their Brexit Planning Voucher worth up to £2,000/€2,250 per business;
    • One-to-one Brexit mentoring and training workshops organised by the Local Enterprise Offices;
    • Brexit Loan Scheme for businesses with fewer than 500 employees.
  3. Understand the impact on your supply chain: The origin of goods will be key in determining the amount of duty payable on goods moving between the UK and Ireland. It is imperative that you understand where goods originate, the value of the goods and the relevant customs classification code. If any materials are likely to be significantly impacted or no longer authorised for sale on the EU Single Market, you may need to identify potential alternative certified sources. If major supply chain disruption is likely, you may need to consider alternative route options.
  4. Communicate with suppliers, agents, customers and staff: Hold discussions with your suppliers and customs/logistics agents. It is important to ensure that the roles and responsibilities of each party are clearly defined and understood. If using the UK landbridge, work with your bank to ensure you have the necessary financial guarantee in place. If increased costs will need to be passed on to your customers, or if there is likely to be a significant impact on lead time, discuss these changes with customers in advance. Ensure designated personnel within your organisation are clear on their responsibilities and have sufficient knowledge and training to comply with the additional regulatory and certification requirements.
  5. Determine the cashflow implications: Prepare a cashflow forecast which incorporates potential tariffs, duties and VAT. Expected exchange rate fluctuations should also be incorporated. Consider whether your current banking facilities are sufficient to support any additional cash needs in your business. Financial supports are available to facilitate cashflow planning.
  6. Consider additional regulatory requirements: From 1 January 2021 UK bodies will no longer be authorised to certify compliance with EU regulatory standards. If your business relies on certification from a UK Notified Body, it is vital that you now source an EU-based Notified Body. This may have knock-on impacts on the marketing and labelling of goods. There are also potential implications for the recognition of EU professional qualifications in the UK (and vice-versa) and for the transfer of personal data between Ireland and the UK. Engagement with regulators is key to ensuring continued regulatory compliance post 31 December 2020.

With the end of the Brexit transition period now only weeks away, businesses should avail of all relevant supports to ensure they are ready on time, says FPM’s Colleen Flanagan.

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Act now to minimise disruption

With just over 3 months to go until the end of the transition period, it is essential that your business takes steps now to mitigate the risks. The costs of failing to prepare are simply too high—delay at ports, knock-on impacts on wholesale and retail supply chains and the potential financial penalties and reputational damage arising from non-compliance with regulatory standards. Although some element of disruption is inevitable, chaos is not.


Is your business Brexit ready?

If not, act now. As always, if you require assistance, FPM’s Brexit Team will be pleased to help you. You can email me directly at the address below or Contact us today to speak to a member of our team.

Contact Colleen

Colleen Flanagan / Manager

c.flanagan@fpmaab.com

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