By Giles O’Neill, Brexit Unit Manager, Enterprise Ireland
Regardless of the outcome of the current negotiations on a Brexit deal, our trading relationship with the UK will change fundamentally and irrevocably on 1st January 2021. While the Brexit process may have been plagued with uncertainty up until now, the one absolute certainty in relation to the trading relationship, is that moving goods to, from or through the UK (excluding Northern Ireland) will require a customs declaration from 1st January 2021.
That will present a massive challenge for Irish businesses. To put the scale in context, nearly 100,000 Irish companies trade with the UK. At present, Irish businesses generate around 1.7 million customs declarations annually, but that will rise to 20 million next year as a result of Brexit.
Goods won’t move without a declaration. There are around 60 points of data in a typical customs declaration and these are connected to various aspects of the shipment. If you get one piece of data wrong, then everything slows down or stops. 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.
The government has put in place a new €20 million Ready for Customs fund managed by Enterprise Ireland to assist Irish businesses to meet this challenge. 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. It also covers costs associated with redeploying an existing member of staff. The grants can be used for employee salary costs and a contribution towards overheads, including software and IT infrastructure.
Of course, many companies use third party logistics providers, freight forwarders and customs intermediaries to look after customs declarations on their behalf. If you do, make sure they are ready for the additional work, and that they have taken on additional people to manage this element of your business on your behalf.
The very last thing businesses want to see is shipments stuck at ports in January because Irish businesses have been overwhelmed by the sheer volume of extra work created by Brexit. Research indicates that insufficient customs clearance capacity is a significant risk for Irish enterprises from 1st January 2021. Business needs to act now to build capacity and this grant will help them meet the challenge that will become very real on 1st January next.
While getting ready for the certain changes in the customs area is vital, businesses also need to review their overall Brexit plans now. 2020 has been a turbulent, challenging year for businesses and it is understandable that Brexit planning was overshadowed by the need to respond to the COVID-19 pandemic. However, with less than 60 days to go, it is imperative that companies dedicate time and resources to Brexit planning.
To assist companies, Enterprise Ireland has recently launched the Brexit Readiness Checker. The online tool assesses preparedness across a range of topics including customs procedures, finance & currency management and strategic sourcing. The Brexit Readiness Checker provides companies with an individual report, highlighting areas for action and providing information on support and advice available from State agencies and others to help companies prepare for Brexit. You can access the online tool here.
Brexit becomes a reality on 1st January next. Being ready for the fundamental change in our trading relationship with the UK must be a priority for business. This is the time to act – information, advice and support is available. I would urge every business in Ireland to act now.