Preparing your business for Brexit

With effect from 11 pm on Friday, 31 January 2020, the UK is formally no longer a member of the European Union (EU). However, the Withdrawal Agreement provides for a transition period until 31 December 2020. During this period the UK will continue, for the purposes of the movement of goods, services and people, to be as if it were a full EU member state. 

During 2020, the EU and UK will be attempting to negotiate a new Free Trade Agreement. However, it is unclear whether a deal will be agreed or not. If no deal is agreed during the transition period, the trade of goods will be subject to tariffs under the World Trade Organisation default terms.

It is recommended that Irish businesses who trade with the UK start to take measures to ensure they are ready for any new requirements post 31 December 2020. As part of the planning, businesses should register for customs and be aware of the key reporting compliance requirements, some of which are outlined below. 

Register for customs

If you trade with a non-European Union (EU) country, you will need a unique Economic Operators Registration and Identification (EORI) number. 

Whether there a free trade agreement is arrived at or not, if you are a trader who imports or exports goods into or are moving goods through the UK you may need an EORI number.

If you have previously been registered for Customs and Excise (C&E), you may already have been allocated an EORI number – you should check with Revenue.

Review the physical and financial movement of your goods and review the VAT treatment of same following end of Transition Period.

For more detail, read our article on VAT implications of Brexit

Obtain the key customs information for your goods

Every good has a commodity code. This commodity code determines:

• the customs duties and other charges levied on the goods
• the preferential treatments that may apply to their import
• the restrictions and prohibitions that may apply to the import, export or transit of the goods

Engage with customers and suppliers to decide who will be the Importer or Exporter of Record for your purchases and sales.

The Importer of Record and Exporter of Record (IOR/EOR) is the person or entity officially responsible for ensuring the import/export transaction complies with all the regulations in that country, that goods are correctly valued, pays the relevant taxes and duties and files all the correct documentation and permits.

Apply for a customs and VAT deferred payment account

In general VAT, along with customs duty, is payable at point of importation into the State from outside the EU before goods can be released. However, in practice most traders have a deferred payment account which will allow you defer the payment of VAT and customs duties until the 15th day of the month following importation.

Consider engaging a customs agent

A customs agent acting on your behalf, will have experience in all aspects of processing of customs clearance import and export documents and the facility to lodge electronic customs declarations to Revenue.

Apply for Authorised Economic Operator (AEO) / ”trusted trader” status

AEO status is a certified standard authorisation issued by customs administrations in the European Union (EU). It certifies that an economic operator has met certain standards in relation to: safety and security. systems to manage commercial records. compliance with customs rules.

An AEO benefits from easier access to simplified customs procedures and priority treatment for release of goods.

More information to help your business prepare for Brexit:

Brexit strategies to deal with border controls
Brexit loan scheme for SMEs
Five steps to Brexit protection
Brexit readiness checklist

Crowe is actively assisting a number of clients in preparing for Brexit. Contact a member of our tax team for further information.