Half of Irish businesses are struggling to understand the new customs requirements that will come into effect on January 1 as the UK officially leaves the EU, according to new research carried out on behalf of Declaron.
Declaron, a customs clearance service established as a joint venture between BDO and Fexco, commissioned the study to establish what kind of assistance their customers are likely to need in navigating customs post Brexit.
Of the 300 Irish businesses that trade with the UK that were surveyed last month, more than a third (37%) admitted they have yet to start planning for Brexit, with the primary reason cited being that it is more difficult to prepare with no trade agreement in place between the EU and UK.
90% of medium and large businesses also pointed to Covid-19 for halting their preparations for a post-Brexit scenario.
CEO of Declaron, Michael Nolan said the lack of a trade agreement between the UK and EU should not stop preparation for the one “guaranteed task” Irish businesses will have to deal with come January - creating and submitting Customs Declarations.
“There are certain steps that every business must now take to be able to import and export with effect from January 1 and inaction now puts the efficiency of their trading with the UK at risk,” he said.
The survey also found that of the 54% of Irish businesses who admitted they do not understand the new customs clearance procedures guaranteed to come into effect next year, a lack of knowledge or planning was particularly prominent amongst SMEs.
Carol Lynch, Director of Declaron and Partner in BDO said Irish companies are “sleep walking into a trade agreement trap.”
“Even when a Trade Agreement is concluded, there will still be a requirement for import and export declarations. The agreement only means that customs duties may not be payable. Compliance obligations actually increase rather than decrease. The delay in the service agreement being finalised cannot be seen as reason to delay preparations.”