Carol Lynch, BDO

 

As you know we are now fast approaching the final deadline in the Brexit Saga.

As and from 1 January 2021 the UK will be treated as a full non-EU Country as the Transition period will end.

In terms of Brexit this year has seemed like a type of “phoney war” (or phoney Brexit) as despite the fact that the UK did in fact leave the EU on 31st January 2020 there have been no obvious changes in any area. This was because a Transition Period kicked in immediately on 1st February, but this now expires on 31st December.

 

Brexit Status for Year End

There is still a misconception in the marketplace that talks are ongoing to either extend the Transition Period or secure an agreement which will continue to mean no changes. This however is not the case.

There is also some confusion around the meaning and outcome of the current Free Trade Agreement negotiations taking place between the UK and EU. The outcome of this, if successful, will mean that customs duties should be eliminated on most products which qualify as “originating” however some areas could be excluded e.g. agri-food. In addition, to qualify for the benefits of a Free Trade Agreement, a company will need to be able to comply with the rules of origin and produce verification of origin status.

 

Regardless of the outcome of the talks, the UK will be a full non-EU country with effect from 1 January (what has been described as a full “Economic Brexit”).

For Customs purposes this will require all Importers and Exporters to lodge Customs Declarations with the Customs Authorities to cover all Imports into Ireland and all Exports out of Ireland (along with corresponding requirements on entering into and departing from the UK).

For any company Importing and Exporting this is going to be a huge additional cost and burden which unfortunately cannot be avoided.   It is therefore important to be as prepared as possible, to minimise the risk of delays and to have put in place all cost mitigation measures.

Companies also need to determine how they are going to lodge Customs Declarations i.e. whether to take this in house or out-source it. Either way it is important to become familiar with Customs requirements and to be able to provide the information that is required for Revenue.

There are a lot of Government supports out there in this regard and a lot of training is being provided and we would encourage companies to avail of these as soon as possible.

 

Carol Lynch is a Partner at BDO Customs & International Trade Services