Irish businesses that trade with the UK should not wait until a trade deal has been agreed between the UK and the EU to begin their preparations for Brexit, customs clearance service Declaron has warned.
Some 37 per cent of Irish businesses that trade with the UK have yet to start planning for Brexit, with their primary reason being the fact that no trade agreement is in place, according to research commissioned by Declaron, which is a new partnership between accounting firm BDO and fintech company Fexco.
The research also found that 54 per cent of businesses that trade with the UK do not understand the new customs clearance procedures that are guaranteed to come into effect on January 1st, 2021, said Declaron.
Trade agreement
"I know that businesses are concerned about whether there will be a trade agreement in place but that should not stop preparation for the one guaranteed task they will have to deal with and that is creating and submitting customs declarations," said Declaron chief executive Michael Nolan.
“There are certain steps that every business must now take to be able to import and export with effect from 1st January and inaction now puts the efficiency of their trading with the UK at risk.”
While lack of certainty about tariffs and rules was identified as the number one Brexit issue by respondents to the survey, the effects of Covid-19 were also cited as a big barrier. Almost 90 per cent of medium and large businesses said it had affected their planning.
Border delays
“Time management, costs, border delays, lack of customs expertise and audit compliance will all be new challenges facing Irish businesses who move goods into and out of the country,” said Mr Nolan.
BDO partner and Declaron director Carol Lynch said Irish companies were "sleep walking into a trade agreement trap", as even if a trade agreement is reached, there will still be a requirement for import and export declarations.
“The agreement only means that customs duties may not be payable. Compliance obligations actually increase rather than decrease. The delay in the service agreement being finalised cannot be seen as reason to delay preparations.”
