The vast majority of small and medium businesses have no experience of dealing with customs and Brexit is going to cause huge problems for them says the CEO of the Irish Small Medium Enterprises association (ISME).
Neil McDonnell is encouraging businesses, retailers and food sellers who import or export to the UK to get ready for Brexit.
“They really need to be actively planning for a hard Brexit scenario.
“There are no good outcomes for SMEs trading with the UK now because of Brexit,” he told RTE’s Today with Sean O’Rourke show.
Business confidence is lower now than it has been for two years, he added.
The changes that Brexit will bring about for small and medium enterprises are going to have a huge impact, he said.
The duty elements for businesses trading with the UK are “unavoidable” he said.
“When the UK is out of the European Union duties will arise that will have to be paid.”
The issue of VAT at point of entry is also going to cause problems for many, he added. At present payment for VAT on goods from the UK can be deferred, he explained.
Businesses in the agri-food sector are going to suffer the greatest impact, he said as this is the area with the highest tariffs under World Trade Organisation rules. “That’s going to be a very difficult area” once the UK leaves Europe.
“Once the UK departs from the Customs Union and joins the WTO it becomes a third party transaction.” This will mean more time and cost penalties, he warned.