Customs is the big challenge for businesses post-Brexit – Chartered Accountants Ireland
The biggest tax challenge arising from Brexit is customs duties, according to Chartered Accountants Ireland (CAI).
Businesses, in a recent survey carried out by the CAI, reported very little knowledge on how a Customs Union might operate following the conclusion of the Article 50 period.
The study found that while many businesses were aware that the departure of the UK from the Customs Union would lead to tariff arrangements, as there is no clarity on what these might be, this presents a challenge to doing business.
The study also revealed suggestions, particularly from businesses involved in the food processing industry, that delays in clearing customs would for practical purposes eliminate cross-border trade between the north and the south of Ireland.
“If we don’t get this right, it could signal the end of cross-border trade in some industries” said Brian Keegan, the Institute’s director of public policy and taxation.
Post-Brexit, and without a trade agreement, customs duties will typically add anything between 2pc and 50pc or even more to the cost of imports and exports between Ireland and the UK the CAI said.
Even if the outcome of Brexit talks between the UK and the EU results in free trade, there will still be customs controls applied according to the CAI.
The report recommended that a programme of education and resourcing should be put in place to assist smaller businesses adapt to compliance with the Unified Customs Code and other compliance requirements following the departure of the UK from the EU.
The survey also recommends that the EU institutions consider providing a funding mechanism to help Irish SMEs with cash flow implications of customs and VAT compliance on imports from the UK.