Boris Johnson’s elevation as Prime Minister and appointment of several Brexiteers to the cabinet has significantly increased the potential for a no-deal Brexit on the 31st October.
A recent report by Investec Economics has put the potential of a no-deal Brexit at 40%, a rise of 39% since the end of July. A no-deal Brexit scenario would mean the UK would have to leave immediately and no agreements would be in place in relation to the future relationship between the UK and the EU.
Again, lots of ‘uncertainty’. Ireland of all the European countries would be the worst affected by Britain’s departure from the EU as the UK are their main trading partners.
Preparing for No Deal
Whether Brexit happens on the 31st of October or the deadline line is extended to 31st January 2020, it is becoming increasingly clear that preparation is key in preparing for a potential no-deal scenario, businesses must have a contingency plan in place.
Taoiseach Leo Varadkar has conceded for the first time that Ireland “might well have to live with the dire consequences of a no-deal Brexit for a while” and so business preparedness will be a major consideration.
The Irish Government has launched a website designed to help businesses in Ireland prepare, in addition, we have also put some steps together that your business may wish to consider when preparing for a no-deal Brexit.
A no deal scenario will result in a hard border between Ireland and Northern Ireland, which could have a significant impact on your business and how you trade, so it is important to follow the steps below to ensure your business is Brexit ready for such an outcome.
- Review your supply chain and UK market strategy – Look at your supply chains to determine whether you are sourcing from or supplying materials/products to the UK as you may need to change how and where you source your supplies in the future.
- Understand the new rules for importing from or exporting to the UK – Check the new customs and regulatory requirements and make sure you understand how these will apply for your business. Apply for an EORI number – An Economic Operator Registration and Identification number which identifies your business and ensures you are paying the correct tax.
- Be aware of possible changes to transport and logistics for goods transiting via the UK – There will likely be changes to how goods are transported between Ireland and other EU countries by road through Britain, including the potential for disruption at ports, such as Dover and Calais.
- Review all your regulation, licencing and certification requirements – EU registrations, certificates, licences and authorisations are required for the trade of many types of goods and services. Brexit will particularly impact highly regulated sectors such as:
– Construction products
– Financial services
– Machinery and electrical equipment
– Medical devices
– Transport services
- Review your contracts and your data management – Review your contracts with any UK based suppliers and customers to see if you need to make any changes.
- Manage your cash flow, currency and banking – Sterling and euro volatility is already a key challenge for Irish businesses. Brexit could magnify this further and so having a solid solution in place to manage your business’ working capital needs is an important consideration.
- Protect and inform your staff – Many businesses will have employees who are either UK citizens and/or who travel to and from the UK for work. It is therefore important that your business checks these requirements, for example any professional qualifications and/or licences needed to practice.
- Take advantage of government Brexit programmes and support – A range of programmes and support options have been developed to help businesses with areas such as financial support, business planning and training and upskilling supports.
- Know more about the impact on your sector – there is a great deal of research and insight available on the impact of Brexit on the Irish economy and on specific sectors, including retail, construction, healthcare, tourism and financial services. The government of Ireland website along with Enterprise Ireland, Inter Trade Ireland and the British Irish Chamber of Commerce all address the impact that Brexit could have on different sectors whilst also listing the resources available to Irish businesses.
How Trade Finance can help
White Oak IE, Director, Colm O’Reilly said, “As the old saying goes ‘by failing to prepare, you are preparing to fail’ and now is the time to prepare.
“At White Oak IE, we can help you prepare for likely changes in respect of overseas trade, removing some of the headache surrounding present Brexit uncertainties.
“Our trade finance product can finance several key purchases including VAT, duty and logistics helping you to free up your working capital. We can also help to significantly reduce your risk and management time, as we manage the process for you. These solutions could be a viable course of action for your business in the event of a no-deal Brexit.”
Find out more about our trade finance solutions here or call us now on +353 (1) 5634130.
A version of this blog originally appeared on our whiteoakuk.com site here.