September 20 2020 –
Regardless of the outcome of the Brexit negotiations, our trading relationship with the UK will change fundamentally and irrevocably on January 1. While the Brexit process may have been plagued with uncertainty up until now, the only 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 January 1, 2021.
That will present a massive challenge for Irish businesses. To put its scale in context, nearly 100,000 Irish businesses 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 data points in a typical customs declaration and these are connected to various aspects of the shipment. If you get one piece wrong, then everything slow downs 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 €20m 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. The grants can be used for salary costs and towards overheads, including software and IT infrastructure.
The urgency of the situation cannot be overemphasised. If someone told you that you are not going to be able to do business with your customers in the same way, that it’s going to be more difficult to deliver to them, more costly, and definitely not as easy as it used to be, you’d be concerned. If someone told you that it was going to happen in about 100 days’ time, you’d be very worried indeed.
It is quite understandable that people have become distracted by the minutiae of the Brexit negotiations and the noise surrounding them. It is even more understandable if they have spent most of their energies dealing with Covid-19 for the past eight months.
But that doesn’t remove the stark reality that the UK will become a third country as far as trade with the EU is concerned from January 1, next year. And a trade deal, however all-encompassing and liberal, will not remove the need for customs declarations.
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, 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.
Businesses which wish to avoid such a situation should apply now for the Ready for Customs grant at www.prepareforbrexit.com/readyforcustoms/