OPINION: Vitally important for Louth businesses to prepare for end of Brexit transition period
Since the emergence of Covid-19 earlier this year and the resulting global pandemic, Brexit, which once dominated the news headlines, swiftly took a back seat. The fear of Brexit was quickly replaced with the fear of Covid-19 disruption.
The UK government recently renewed preparations for Brexit with the launch of its advertising campaign in July called "The UK’s new start: let’s get going". On the TV advert, a "Check, Change, Go" strapline directs people and business to a checker tool on the Government’s website which outlines the next steps business in the UK need to take before the end of the transition period. The need to prepare for business in Ireland trading with the UK is now no different.
Though Brexit has been a legal reality since the 31st of January 2020, people and business have largely been insulated from the consequences because of the existence of the 11 month long transition period taking us to the end of the year. This continues to bind the UK to the EU customs union, single market and rules meaning little has changed. Despite the UK and Irish Government's efforts, business is alarmingly unprepared to service the transition from the current ‘Single Market’ within the European Union, to the new trading arrangements that will prevail when the current transition period ends this December 31st at 11pm.
Business in Ireland await anxiously clarity on the operation of the NI Protocol elements of the Withdrawal Agreement. What is clear to date, is that there will be no border for trade between the Republic and Northern Ireland. But what does the end of the Transition Period mean for business in County Louth that are sourcing products from Great Britain (“GB”), selling products to GB and sourcing products from Europe that pass through the British landbridge? It means there will be changes from a customs and trade perspective.
While negotiations are ongoing between the EU and UK on the future trading relationship, there are steps that business in Ireland can and should take now to prepare and ensure they can manage the costs and risks associated with trading across a customs border. The preparations made now by business in County Louth to trade with GB, will be effective for no matter what the outcome of negotiations transpires to be. Though business in NI can expect to learn the exact detail of how ‘unfettered’ their access to GB will be, the situation is not the same for Irish business trading goods with GB. Even if an EU – UK Free Trade Agreement transpires in any form, Irish business have the clarity that there will be a customs border with GB that brings all the associated need for checks and controls.
Business in Louth now need to undertake a review of their supply chains to understand how the end of the Brexit transition period will impact them and understand how they will submit customs declarations to the authorities. They will need to develop the required knowledge to identify and communicate accurate information to Revenue on impacted goods flows and calculate what the potential financial impact will be due to any introduction of customs duties and import VAT. They will need to put in place the relevant authorisations, facilitations and certifications to operate efficiently and cost effectively.
These requirements fall on the backdrop of the significant gaps in import/export skills and resource amongst business of all size, but particularly SME’s. It is an urgent priority for Irish business to get staff trained, build internal competence and process, or to look at options to outsource in order to cope with the extra information and documentation demands.
There are many supports available to assist companies in planning and preparing for the end of the transition period. In Louth the Local Enterprise Office acts as a first port of call for SME’s, providing tremendous support assisting business to access a range of information, financial and consulting supports. Other agencies such as InterTrade Ireland, Skillnet and Enterprise Ireland provide additional supports under various criteria.
Businesses have difficult choices to make in the coming months, and it may be necessary to seek expert advice to make these decisions because, ready or not, on January the first 2021 a new trading reality dawns for Irish business…
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