The UK has left the European Union with a deal agreed on their future trading relationship. What do you need to do now to prepare for this new business world?
Brexit has happened. While a deal has been agreed, there are significant impacts and implications for Irish businesses. What can you do now to mitigate the risks ahead?
It is time to consider now all of the impacts of Brexit and how the new trading relationship with our nearest neighbour will affect your business. Where there is change, there is opportunity and adjustment to another new normal is critical. Look at all of the scenarios - import substitution, alternative suppliers and new markets - while ensuring you have the skills and resources to meet the new demands.
While it is positive that a Brexit deal has been agreed, understanding and navigating the new rules will put significant pressure on businesses already reeling from the effects of COVID-19.
It is imperative to determine exactly how the new trade terms and the associated supply chain, workforce, trade and tariff changes will affect your business. We have seen how disruption and uncertainty have shaped the economy and your business’ outlook in recent months.
It is time to take learnings from that experience and build upon the resilience shown during the coronavirus crisis to prepare for what lies ahead.
These are the most critical areas you need to deal with now.
Whatever form it takes, Brexit will impact your business and we strongly advise you to prepare now. While there is uncertainty around the final outcome of the process, there are a set of no risk actions that you can take now to ensure that your business is Brexit-ready, particularly if you are engaged in cross-border trade.
Assess which customs and trade registrations, authorisations and reliefs must be put in place. These enable customs clearance and duty payments. They also meet relevant regulatory licensing requirements and secure available duty reliefs. The engagement of a customs agent or broker will help ease the filing of customs declarations.
To understand the impact of Brexit, companies need to map and confirm their supply chain models. This will illustrate direct and indirect exposure to customs and compliance tariffs and regulations. A challenge for Irish business is the use of the UK as a land bridge, with products moving through the UK en-route to and from Ireland.
Irish companies will need to think strategically about customs and trade. On import and export, there will be a need to file customs declarations for all goods imported and exported to or from the UK. Expert customs and trade knowledge will be essential for day to day operational activities. This is also to building a robust customs function to support products crossing international borders.
There has been commentary about "trusted trader" status, and what this could mean for importers and exporters after Brexit. Authorised Economic Operator (AEO) status is a well-established "trusted trader" customs programme. It has been in place in the EU since 2008. After Brexit, AEO could provide for faster customs clearance, providing priority access to companies who have been pre-assessed.
Many businesses may find that their current contracts lack provisions to deal with Brexit. For the purposes of customs and trade, and the changing relationship between the UK and the EU, it will be critical to assess all contracts. Focus should be given to determine if the buyer or seller handles fulfilling relevant customs obligations, including the lodging of customs declaration and the payment of customs duties.
Import VAT is a duty of customs. A result of Brexit is that it now poses a cashflow challenge for companies trading cross-border with the UK. Import VAT will be charged at the border when importing goods, in both Ireland and the UK. Cash flow problems will increase for companies that need to hold extra inventory as insurance against potential border delays.
There is no guarantee that border procedures will operate smoothly immediately after Brexit. Companies need a contingency plan to mitigate against any risk of delay when goods enter or leave the country. Customs reliefs available to reduce customs duty payable should be explored as part of any Brexit planning.
Immigration is the one area where a clear picture is emerging. The UK has outlined details of its settlement scheme and temporary residence scheme. Registration for UK citizens will be a big change for employers. Systems and immigration policies will need to be updated. Firms should already have completed an impact assessment on what this could mean for their business.
Intellectual property protection—including patents, trademarks, registered designs and copyright—could all change after Brexit. The British government says European patents will still apply in the UK. Yet, the UK is "exploring options" in other IP areas, such as trademarks and designs, because in many cases these will lapse after Brexit.