TENS OF THOUSANDS of Irish businesses have been told they haven’t registered to move goods to and from the UK after Brexit, with uncertainty continuing on what the landscape will look like once our closest neighbour eventually leaves the EU.
Although we now know it’s more likely that the UK won’t be leaving the EU as originally set out on 29 March, this persistent uncertainty has forced many companies to trigger expensive contingency plans, business groups say.
The no-deal tariff plans published by the British government was just the latest in a string of announcements that caused alarm in Ireland earlier this week, but Taoiseach Leo Varadkar said in Washington that a package of measures to support Irish businesses will be approved by Cabinet next week.
The Taoiseach told businesses that the government “has your back on Brexit” but firms have also been warned to step up their preparations with Brexit remaining a major threat for many.
EORI
An Economic Operators Registration and Identification (EORI) is something that businesses must register for if wish to move goods to, from or through a non-EU country.
When the UK leaves the EU, businesses will need an EORI to move goods to, from or through the UK. As of the beginning of this month, however, over 60,000 businesses who may need one hadn’t got an EORI.
If the UK was to leave the EU without a deal on 29 March – which was ruled out by MPs earlier this week – it would have meant uncertainty for businesses that don’t have an EORI.
It is clear from the statistics that businesses were becoming increasingly aware of the need to step up their Brexit plans since the start of this year.
In the whole of 2018, there were 2,976 registrations for an EORI. In January and February 2019, there 2,617.
Last month, Revenue advised that there were around 100 applications per day, with applications in February up 330% on January.
And, since January, Revenue has written to around 84,000 businesses – who from its records show they recently had at least some level of trade with the UK – and encouraged them to do a Brexit impact assessment for their business.
Minister for Finance Paschal Donohoe, in responding to a parliamentary question, also released a breakdown of the amount of businesses which don’t have an EORI written to by Revenue by county.
Dublin had by far the most with over 14,000 businesses. Next was Cork with 6,183. Donegal and Galway had over 3,000 businesses contacted by Revenue.
Only Carlow, Laois, Leitrim, Longford, Offaly and Roscommon had less than 1,000 businesses without an EORI.
‘Worrying’
The Irish Small-Medium-sized Enterprise Association (Isme) has said it is “worried at the low uptake of EORI numbers”, adding that they are “very east to get”.
“There’s also low take-up of the start-to-plan vouchers, which we understand from InterTrade Ireland is in the high hundreds only,” a spokesperson said.
Given that this is effectively a free €2,250 grant for professional consultancy, there is no reason that any business with a Brexit exposure should not have applied for it already. It’s not too late for companies to act.
In a survey carried out by Isme of its members for the first quarter of this year, 68% of firms said they had not yet completed a Brexit readiness plan.
Meanwhile, customs arrangements are the biggest cause of concern for SMEs, with over 60% saying it was a major worry when the UK leaves the EU.
Business group Ibec, meanwhile, has said that no matter what Brexit scenario Ireland is ultimately faced with, it is important to have the appropriate preparations in place.
Arnold Dillon, Ibec Head of Strategic Campaigns, told TheJournal.ie: “Brexit uncertainty has now forced many companies to trigger expensive contingency plans. Taking a ‘no deal’ cliff edge off the table is the priority, but business also needs clarity on how a ‘no deal’ outcome would be managed on the ground, from day one.
Even in worst case scenarios, we will need a phased transition to a new trading relationship and a compliance trajectory that minimises disruption. Adjusting to a radically new trading relationship with the UK at the end of March is neither possible or realistic.
Dillon added that it was urgent that the Irish government make provisions to introduce State aid measures for businesses most impacted by Brexit.
“A ‘no deal’ Brexit would present an unprecedented economic challenge that would demand immediate state aid intervention to save businesses and protect jobs in certain sectors and business that are particularly exposed,” he said.
Leo Varadkar’s government has already signalled it would aim to secure EU backing to support businesses at risk financially.
In January, Minister for Business Heather Humphreys met with European Commissioner for Competition Margrethe Vestager.
“The focus of our meeting centred on the severe challenges Irish businesses, especially SMEs, would face when the United Kingdom left the European Union,” she said. “The Commissioner emphasised that the Commission stood ready to act urgently to mitigate the impact of Brexit on Irish firms.”
The European Commission has already given State aid approval for national investment in Irish cheese producers the Carbery Group to the tune of €65 million.
“This test case demonstrates what we want to do for the food sector,” Humphreys said.
Speaking yesterday in London, Minister for Finance Paschal Donohoe said Ireland will wish to avoid a series of “rolling cliff edges” if the UK requests a delay
“I believe it is highly important that we do all we can to avoid being in a scenario of rolling cliff edges… particularly from a financial market stability perspective and economic stability, we need to be aware of that,” he said.
Uncertainty may remain, but Irish businesses now have some time to put the necessary provisions in place while the government takes its own steps to offer support until the UK finally leaves the EU.
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