Home Directory *IFSC Online Ltd Chartered Accountants Ireland warns businesses to prepare for no-deal Brexit immediately

Chartered Accountants Ireland warns businesses to prepare for no-deal Brexit immediately

Businesses on the island of Ireland are being warned that given the lack of progress in Brexit negotiations, they have no option but to assume the EU and the UK will fail to reach agreement by the end of the year and to prepare accordingly.

As the latest round of negotiations continue in London, Chartered Accountants Ireland is urging negotiators to reach a sensible agreement that will save businesses across the island. 

A recent survey of businesses carried out by the Institute shows that only one in ten businesses in Ireland and Northern Ireland are ready for the changes Brexit will bring. Over half have some measures in place but plan to do more once the outcome of negotiations is known.

Commenting, Cróna Clohisey, Public Policy Lead, Chartered Accountants Ireland said

“The wait and see approach could prove detrimental for many businesses on the island, which are struggling with the devastating effects of COVID-19. Pandemic aside, Brexit needs to be top of their agenda for the next few weeks to ensure their survival. There are relatively straightforward things that must be done now to start preparations regardless of the outcome of the negotiations.

“It is hard to believe that it has been over four years since the Brexit vote and with just weeks to go until the end of the transition period, the UK and EU remain without some form of agreement.  A no-deal Brexit will bring hazardous trading conditions and supply chain disruption for businesses north and south. We are calling on negotiators on both sides to provide some sort of assurance to enterprises about the future trading landscape.”

Trade under a free trade agreement might eliminate customs duties but it in no way removes the compliance and administrative burden that customs declarations and checks will bring. Research by the Institute has shown that for most sectors, this disruption is an even greater concern than customs duties themselves with almost half of businesses stating they do not fully understand the customs declarations that will be required to trade goods between Ireland and the UK come 1 January 2021. 

Ms Clohisey continued:

“Even in the best-case scenario, if the UK and EU reach some sort of agreement on trade, there isn’t time for it to be the comprehensive free trade deal that was hailed during the Brexit referendum– that process takes months even years to arrive at.  The best we can expect is the bare bones of a deal which will likely prioritise avoiding the imposition of tariffs and quotas on goods and is unlikely to extend fully to services.”

The practical measures that businesses should now adopt include:

  1. Register online with HMRC or Revenue for an EORI number – you cannot trade without one. 
  2. Contact your suppliers and logistics providers about the continuity of goods and services you need for trade.
  3. Check if your non-UK suppliers use the UK as a land-bridge and ascertain whether this will cost and cause delays
  4. Classify the goods that you import or export for customs duties and know their origin
  5. Seek out a customs agent or enhance in house customs knowledge
  6. Ensure that you have a line of credit to deal with the customs duties that will arise on imports from the UK or Ireland.
  7. Check whether your current certifications, licences or authorisations will be valid post-Brexit.
  8. Use the government supports available.

With all the uncertainty surrounding the negotiations, one thing businesses can be sure of; come 1 January 2021, the trading environment will be vastly different than the simplicity offered by the current Single Market.