Paul Healy is the General Manager here at The Rubicon Centre. With over 25 years of experience in developing start-ups and scale-ups across all technology sectors, Paul has first-hand experience in raising finance, accessing new opportunities, strategy, and company development.
If you own a small business that employs just you, or several hundred people, Brexit is a word that will face you in 2021.
Some of you may remember Customs Clearance practices before the Free movement of Goods under the EU. The world of Commodity Codes, Customs Clearance Points, and the inspections of shipments at points of entry to Ireland. Some of you have experience importing or exporting outside the EU already. But for many, this will be new to them.
For the business owner, Brexit will mean additional work which needs to be completed either by the owner or an identified third party.
Here are some things which I believe the business owner needs to look at if they are to stay ahead of the curve on Brexit.
1.Do you know how your suppliers ship their goods into Ireland?
Up until now, Business owners were very happy to see their goods arrive safely from their supplier. Since the New Year, you now need to know how your goods got to you and what Borders they had to cross.
In the case of goods imported from the UK or crossing the UK borders on the way to Europe you now need to register for an EORI number.
2.Cashflow
With Brexit comes some cashflow implications. Additional cash needs to be put aside to pay duties/vat on goods coming from the UK or passing through the UK borders.
In the case of Goods importing/exporting to the UK, you may have a duty/VAT requirement which will have to be paid once the goods land in Ireland. In the case of goods passing through the UK to/from Europe, you will have to have monies available to guarantee Duty/VAT implications which might arise if the Goods did not pass into Europe again.
To provide for this additional cash flow requirement, business owners may need to take on additional borrowing or bank guarantee schemes to cover this new requirement. Ireland’s main banks and Microfinance Ireland have put in place facilities to support this requirement
3.Carrying Stock
Many business owners have already taken on additional stock to cover delays of deliveries to them due to additional transit times from their suppliers. While this is a good strategy for some business owners, caution should be applied if this is your preferred route to dealing with delays.
Other options to look at should include looking at if you can source supplies outside the UK, and maybe source either in EU Countries( not using the UK Landbridge), or better still locally. Talk to your existing suppliers, who may already have thought of ways to reduce transit times and duty/vat issues to your company.
Remember, carrying high levels of stock has cashflow implications, as well as using up space in your business premises and the danger that some of the stock will go out of date.
Terms and Conditions on ContractsFrom the 1st January, terms of trade used on supplier/buyer agreements will become very important for anyone doing business with the UK. Initially, care will need to be taken on agreements made where you agree to buy/supply goods which previously you would have paid for the shipment to the customer. The Business owner needs to be aware of potential exposure to Duty/VAY charges when using the term, “ Delivered”, or “Delivered Duty Paid”.
Business Owners may opt for “Ex Works” agreements until they become clear of the full costs of transactions between Ireland and the UK( Excluding Northern Ireland)
- Appointment of Person to complete transactions
The business owner has several options to look at:
- Use a Freight Agent
Freight Agents (Shipping Companies-Road/Sea/Air) may be best placed to complete the Import/Export Transactions for you. Before any future shipments take place, you need to make sure that your Freight Agent is happy to complete the transactions for you and has the capability in-house to do it when you need it. Freight moves 24/7 so be aware of the coverage you may need. They will need additional information on your invoices to complete the transaction.
- Appoint an Agent to work on your behalf.
Several new business operations are setting up to serve the needs of business in this area. These offer to complete transactions for a fee to cover the work. This option may be suitable for businesses that will not have many transactions per year but need to access the knowledge that these agents have.
- Appoint a Full time/Part-time Internal Resource
If the business has ongoing transactions, a dedicated person should be nominated to complete this work. Training and Grant aid is available to cover some of the costs of this resource are available
So, what things should you do now?
- Register for your unique EORI number which you will need from now for all imports/exports to and from the UK, including transit through the UK. To Europe. Available through ROS. (www.revenue.ie)
- Agree who is going to do the transactions for you.
- Establish the UK tariff codes for items you are importing or exporting. Carry out this exercise in advance of your transaction. https://www.trade-tariff.service.gov.uk/sections
- Take a LEO training course on Brexit Preparation. All courses are now online.
- Take a 1:1 Mentoring session with an expert. https://www.localenterprise.ie/CorkNorthandWest/Training-Events/Online-Bookings/Remote-Brexit-Support-Sessions-Expression-of-Interest.htm
- Visit the Enterprise Ireland Website: https://www.prepareforbrexit.com/
- Talk to your regular Suppliers/Customers ahead of any business you may do in the future. Discuss plans they have put in place to deal with Brexit transactions.
- Arrange for additional finance to cover cash flow issues that may arise before they occur.
Finally, any preparation work you do now will avoid delays in supply, or unplanned costs which you did not expect to complete a transaction in the future.
