Latest on Brexit for Business

This week I questioned the Minister for Finance about the effect of a no-deal Brexit on customs clearance and other requirements for importing from the UK mainland and Northern Ireland, and the implications he anticipated of a no-deal hard Brexit for VAT and business. I also questioned the Minister about the steps he has taken to date and plans to take to upgrade customs posts, specifically in relation to areas along the border with Northern Ireland.

You can watch below my questioning of the Government about their plans around customs clearance ahead of a possible No Deal Brexit.

When asked the effect of a no-deal Brexit on customs clearance, the Minister for Finance responsed:

When the UK leaves the EU, it will become a third country from a customs perspective and the free circulation and free movement of goods between the EU and the UK will end. This will increase substantially the number of businesses that will have to complete customs formalities and other related obligations for trade with the UK and through the UK landbridge to the EU. This will present a significant challenge for many of those businesses which have not had any experience of third country trade and customs formalities.

I am advised by Revenue that in the last few months as part of its ongoing multi-layered trader engagement programme, Revenue wrote to all businesses who traded with the UK in 2018 or in the first six months of 2019, outlining the practical preparatory steps to take based on their trade pattern with the U.K. In addition, businesses with significant or frequent trade with the UK received or will soon receive a follow up phone call from Revenue. I understand that follow up calls will be completed by Revenue by the end of September.

In regard to VAT, under existing rules, when the UK becomes a third country, VAT on import will be chargeable at the point of importation unless the importer is approved to use the current deferred payment system, which allows approved traders to defer payment of certain charges, including customs and VAT at import, until the 15th of the month following importation. The Deputy will be aware that I made provision in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 for the introduction of postponed accounting for VAT registered traders importing goods from non-EU countries, which will be implemented if the UK leaves the EU without a withdrawal agreement.

Revenue continue to assist businesses planning to register for VAT in Ireland for the first time as a result of Brexit, and for businesses that may choose to make their Mini One Stop Shop digital sales VAT returns through Ireland following a UK departure from the EU.

When asked about the steps he has taken and plans to take to upgrade customs posts, the Minister for Finance responded:

The Government is determined in the context of Brexit, deal or ‘no deal’, to avoid a hard border on the island of Ireland. I am assured by Revenue that in line with that policy it has not upgraded any Customs posts in the vicinity of the border to deal with Customs formalities post-Brexit.

In preparation for Brexit, Revenue is recruiting an additional 600 staff across a range of grades and is confident that this additional resource will be in place by 31 October. This additional resource is primarily being recruited for the purposes of facilitating and supporting legitimate trade.

Revenue has assured me that it already implements a comprehensive risk-based intervention programme to identify, target and disrupt all forms of cross-border smuggling and criminality. Revenue’s focus on such activity will continue post Brexit.

Revenue’s risk-based approach to illegal cross-border activity is, facilitated and supported by very close cooperation with other agencies of the State, including An Garda Síochána, and also with colleagues in Northern Ireland through the North-South Joint Agency Task Force.

I am satisfied that Revenue’s focus on cross-border smuggling is appropriate and well targeted. I know that Revenue keeps such matters under active review and is committed  to quickly confront any new risks as they emerge. I remain open to consider any request from Revenue for additional resources in that regard, if required.