With less than 90 days to go until Brexit, 85 per cent of firms surveyed during Enterprise Ireland’s International Markets Week said they expected their costs to rise by up to 10 per cent as a result of the UK’s departure from the UK.
This illustrates the scale of the impact Brexit will have regardless of the nature of any trade deal which may be reached between the two sides.
"There may be less than three months to go but there is still enough time to act," says Giles O'Neill, Brexit unit manager with Enterprise Ireland.
“If companies are not ready to complete customs declarations for goods going to or from the UK or through it, they need to address that now. If they are relying on intermediaries, they have to ask them if they are ready, if they taken on more people, and how high up their priority list they are.”
“Companies must decide whether or not they will submit customs declarations themselves or if they will engage a customs agent,” adds Ray Ryan, assistant principal in the customs division of the Revenue Commissioners. “Exporters must talk to their customers in the UK to establish who is taking responsibility for the import declarations.”
Customs declarations are detailed and time consuming. “There are 54 points of data on the declaration. If you get one of them wrong or if incomplete you won’t be doing business as normal, and you’re going to be letting your customers down and nobody wants that. There are many imponderables and uncertainties around Brexit, but one thing we do know about is what’s happening in customs. The number of declarations made by Irish firms each year will increase from 1.7 million a year to more than 20 million as a result of Brexit.”
Customs declarations
That certainty arises as a result of the United Kingdom becoming a third country in respect of trade with the EU as and from January 1st, 2021. No trade deal, however comprehensive, will obviate the need for customs declarations.
"Enterprise Ireland has been working with Irish companies to help them get ready for Brexit since June 23rd, 2016," says Enterprise Ireland chief executive Julie Sinnamon.
“Over the past two years have put €125 million in funding for Brexit supports. More than 1,000 companies have taken part in advisory clinics during that time. January 1st is coming fast. The die is cast, the UK leaves the EU on that date. If companies haven’t already done their planning, they should use the remaining time to get ready and take a no regrets approach to Brexit.”
Six hundred companies responded to the Enterprise Ireland survey. “Forty-two per cent said they are fully or significantly ready for Brexit,” says Sinnamon. “And 75 per cent of manufacturing companies identified customs and logistics as major issues. Another 20 per cent still in the process of identifying what they need to do. It is not too late to get ready and that’s why we have introduced the Ready for Customs Grant.”
The Ready for Customs fund provides grants of up to €9,000 for each new full-time employee engaged in customs work. Businesses which employ a new person to deal with customs on a part-time basis can get a grant of up to €4,500.
The grants can be used for recruitment costs, employee costs and the provision of IT infrastructure. Those new staff will be critically important. “While some elements of the customs declaration process will be automated, the new situation will generate a requirement for an additional 2,000 trained people in the area,” says O’Neill.
Risk for companies
The application process for the Ready for Customs Grant is very straightforward, according to O’Neill. “It’s really simple. It’s a two-page application form and any business in customs, freight, logistics or which is trading with the UK is eligible to apply. The grant covers the cost of either taking on someone new full or part-time or redeploying someone. It can also be used to cover other additional overheads such as software. The aim is to help people get up and running by January 1st. It minimised the risk for companies. The grant is paid upfront, that’s very positive from a cash flow perspective. If a company finds it needs to hire more staff than originally envisaged, it can apply again. It’s a shared investment in getting businesses ready for January 1st.”
Another Brexit aid just launched by Enterprise Ireland is the Readiness Checker.
“All our Brexit supports over the past few years have been aimed at helping businesses prepare for it,” O’Neill explains.
“Thousands of businesses around the country have availed of these supports and many of them are ready for Brexit. But companies have to be absolutely sure they are ready. Finding out on January 1st that you haven’t prepared for some aspect of it will be too late. That’s why we have launched the Brexit Readiness Checker.”
The Brexit Readiness Checker comprises 32 questions and only takes between 15 and 20 minutes to complete. It covers a variety of areas including customers, finance, customers, and so on. The software then produces a report which identifies any gaps which may exist in the company’s Brexit readiness. It also identifies the resources which are available to fill those gaps.
“This is available to all companies in Ireland on prepareforbrexit.com,” O’Neill adds. “There is still time for companies to get ready for Brexit if they act now.”