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Key Actions For Businesses in Preparing for Brexit

The UK left the EU on 31 January 2020 under the terms of the Withdrawal Agreement and we are now in a transitional period until 31 December 2020. During this time, the UK remains part of the EU Single Market and Customs Union so EU rules and regulations continue to apply. Whatever the shape of the future trading relationship with the UK post transition, trading conditions with the UK will change and businesses need to prepare for that change.

 

The Department of Business, Enterprise & Innovation has devised a Brexit Readiness Checklist which outlines a range of key actions for businesses in preparing for Brexit. 

 

If you have any queries in relation to how your business may be affected by Brexit or for information on the available supports then contact Donrgal County Council's Business Concierge service at economicdevelopment@donegalcoco.ie 

 

Some key considerations for businesses in preparing for Brexit include:


1 - EORI number
 

If a business is going to be trading with companies or organisations on the UK mainland (this doesn't apply to Northern Ireland) after 1 January, they will need an EORI number.

 

This is a tax reference number issued by Revenue Customs. To apply, go online to Revenue's ROS website and fill in the online form. Your number will be issued within a few days.

 

More information is available at www.revenue.ie/brexit and in the coming weeks Revenue will be contacting up to 90,000 firms it expects to be impacted by Brexit to help them prepare.

 

You may also require a UK EORI if you are responsible for UK import/export declarations. You can get one by registering with HMRC (the UK’s Revenue and Customs).

 

2 - Customs

Consider whether you want to complete customs declarations yourself or use a third party such a customs agent or operator to do so on your behalf. Business should engage with agents/brokers and agree a “pricing schedule” for filing declarations.

 

There is are various customs training available for free at the moment. Skillnet and Enterprise Ireland offer training on various aspects of Brexit.

 

3 - Logistics

It is really important that you contact your suppliers and logistics providers about the continuity of goods and services you need for trade. Make sure anyone you are working with in the UK knows that free trade declarations are needed and let them know where on the route customs declarations will be required.

 

4 - Landbridge

If you use non-UK suppliers, you should also check whether they use the UK as a land-bridge. If they do, find out whether this will cost and cause delays. The UK has signed up to the Common Travel Convention, which means that if you are routing goods through the UK, there won't be delays.

 

If your business moves goods through the UK, or sources supplies or components from mainland Europe via the UK landbridge, you should consider availing of the ‘Transit’ procedure to lessen customs delays and costs. Transit is a customs procedure that allows goods to be moved across international borders under customs control. A guarantee is required to secure all charges on the goods. For more information visit Revenue’s page on Transit.

 

5 - Tariffs 

If there is no free trade agreement struck between the UK and the EU, then tariffs will apply. Companies therefore need to classify the goods that they import or export for customs duties and know their origin.

 

Unlike VAT which is recoverable by many businesses Customs Duty is not recoverable and will represent an additional cost of import.

 

Businesses should work out what tariffs will impact them.

 

Intertrade Ireland provide a tariff checker https://intertradeireland.com/brexit/tariff-checker

 

For a more detailed tariff information which includes further details on any restrictions, quotas or special conditions relating to your product you may contact:

 

The Revenue Support:

Customs Overview: www.revenue.ie/en/customs-traders-and-agents

Goods classification for customs: www.revenue.ie/en/customs-traders-and-agents/importing-and-exporting/classification

 

HMRC Support:

Goods classification service: www.gov.uk/government/organisations/hm-revenue-customs/contact/tariff-classification-service2

 

You can also contact your local Chamber of Commerce who have an extensive set of resources to support businesses trading internationally. They develop and maintain Incoterms® rules which are an internationally recognised standard and are used worldwide in international and domestic contracts for the sale of goods. In addition, they provide a range of training courses in International Trade as well as the 2018 ICC Guide to Export Import. For further information see Chambers Ireland.

 

6 - Finances

New customs duties will inevitably lead to extra costs - not just for the tariffs and VAT which have to paid. You must have security in place to cover potential or existing customs debt for certain customs procedures or facilities. This security must be in the form of a customs guarantee. A comprehensive guarantee allows you to combine all your current customs bonds and guarantees. You will need an authorisation from Revenue to use a comprehensive guarantee. For more information visit Revenue’s page on Comprehensive Guarantees.

 

Ensure your business has sufficient liquidity in place, including debt and revolving credit facilities to withstand potential shocks. “Revolving credit” is a credit line for a fixed sum that is automatically renewed once the whole sum (or an agreed portion) has been repaid.

 

There are Government supports available to help with extra costs, such as the Brexit Loan Scheme or the loans available for small businesses from Microfinance Ireland.

 

Larger traders can use a Deferred Payment Account which allows them to put off paying customs duty by a month. But in the main, cash flow will be important and a challenge too, particularly for smaller firms. 

 

7 - Currency

Currency fluctuations can be a great risk to those involved in international trade, so you may want to get some advice on how to mitigate it.

 

In order to protect your business from financial shocks you could consider hedging; talk to your bank about hedging options. Hedging is a strategy aimed at minimising or eliminating risk, normally involving positions in two different markets, with one offsetting the other. Derivatives – futures and options – are widely used for hedging purposes because they can protect an investor against changes in the spot value of an underlying asset or currency.

 

For more information on managing currency exposure, visit Enterprise Ireland's guidance and tools for managing currency exposure.

 

8 - Who is the importer/exporter of record?

It is important that companies in Ireland talk to their customers and suppliers and figure out who is acting as the importer of record and who is acting as the exporter of record.

 

You should contact your UK suppliers, service providers and logistics companies, or your wholesalers and distributors, to seek assurances about the continuity of goods and services you rely on for trade.

 

9 - Licensing/certification

It is important that you check whether your current certifications, licences or authorisations will be valid post-Brexit. The EU has its own quality certification systems, and up until now, a lot of EU companies used UK bodies to authorise their products and say they are in line with EU rules.

 

Certificates, licenses and authorisations are required for trade in the EU for many types of goods such as medical devices and construction products, and for services for instance in the transport sector. If you rely on certificates, licences or authorisations issued by UK authorities or bodies, these may no longer be valid in the EU post transition period.

 

You need to check whether your current certifications, licences or authorisations will be valid post transition period.

 

If you rely on UK Notified Bodies for conformity assessment certificates, these certificates will no longer be valid after the transition period. You must source an alternative Notified Body in the EU. This may involve transferring certificates to another member state or obtaining new ones altogether. You can check the EU Commission NANDO website for a list of designated EU Notified Bodies.

The National Standards Authority of Ireland (NSAI) has prepared useful factsheets that you can consult for further information.

 

10 – Data Protection

Brexit will have an impact on the Data Protection obligations of Irish businesses and organisations which transfer Personal Data to the UK (including Northern Ireland). In the event of no agreement on the future relationship between the EU and UK, the UK will become a “third country” for the purposes of the General Data Protection Regulation (the “GDPR”) and transfers of Personal Data to the UK (including Northern Ireland) will be subject to the rules on International Transfers to Third Countries.

 

If your business involves the transfer of Personal Data to or from the UK (including Northern Ireland), you will need to ensure that sufficient safeguards are in place so that you can continue to transfer this data after the transition period.

 

All businesses are advised to review their existing processes and contracts to assess whether they involve Personal Data transfers to the UK (including Northern Ireland).

 

Options that can be considered may include:

  • Amending contracts and inserting the model Standard Contractual Clauses (SCCs) - (Article 46 - GDPR). Information on the “model” clauses and a sample set of SCCs (Controller to Processor) can be found on the Data Protection Commission website at: dataprotection.ie/en/media/123.
  • Applying for Binding Corporate Rules (“BCRs”) to be adopted for Group transfers (Article 47 - GDPR).
  • Considering whether any of the derogations provided for under Article 49 of the GDPR apply. It is important to remember that these derogations can only be used in limited circumstance as set out in Article 49(1) and are usually not suitable for “repetitive” or “regular” transfers of Personal Data.
  • Updating Privacy Notices and other data protection documents and website content that set out how your business “transfers” Personal Data (i.e. the “where” and “why” in the data chain). 

 

11- Financial Supports

Government departments, enterprise agencies and regulatory bodies have a range of supports covering advice, finance and training to help your business navigate its way through Brexit.

See more on Brexit supports for business.

 

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