Issue 1 2019
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‘No-Deal’ Preparation for Irish Businesses The heightening uncertainty surrounding a Brexit ‘deal’ or ‘no-deal’ has regrettably amplified in recent weeks. With the possibility of a ‘no-deal’ becoming more tangible, this factsheet developed by Chambers Ireland, the Chamber national body, will help you navigate this unchartered territory. For information relating to exporting and customs please see the feature in Chamberlink.
VAT
The EU’s VAT regime enables EU member country businesses to immediately reclaim the charge on goods bought from other EU member countries. In a ‘nodeal’, the UK will then be outside the EU’s VAT regime. Businesses may be required to pay the VAT on goods imported from the UK at the point of entry while waiting up to two months to reclaim the money. Businesses should re-evaluate budget plans for potential increased costs of trading with the UK.
Cash Flow and Currency
Cash flow management is a key concern. Business are advised to introduce strategies to ensure the continued ability to make payments; coordinate with UK based creditors and debtors; define priorities and consider the location of bank accounts along with forecasting anticipated receipts/payments (including estimated tariffs). While the UK does not use the single European currency, business should become aware of the exposure to the Sterling currency and mismatches between assets and liabilities, as well as whether currency clauses need to be inserted. A ‘no-deal’ Brexit is likely to result in an increase in volatility of the Sterling / Euro exchange rate. It is prudent to ensure strategies to mitigate any additional exposures are considered.
Data
Rules govern data flows to and from the UK and the EU under the General Data Protection Regulation (GDPR). These will be subject to change in the event of a ‘no-deal’. While data transfers from businesses operating within the UK to businesses operating within the EU should not be impacted by a ‘no-deal’ Brexit, businesses operating in Ireland or the EU may be forced to review existing and new contracts to facilitate future data transfers to the UK. Business should map any personal data being transferred to the UK from their organisation. Organisations should update the company/group privacy notice and other relevant documentation.
Free Movement of People
Under a ‘no-deal’ Brexit, UK citizens will become third-country nationals under EU law. Outside of EU agreements, Ireland has a Common Travel Area and associated rights secured with the UK. This allows for Irish nationals to continue to enter and work in the UK, and vice versa without restriction. This agreement does not apply to the other 26 Member States. Once Brexit comes into effect free movement of UK citizens to the EU and vice versa will cease to exist. If a business has staff who are EU citizens (but not Irish or UK citizens) working in Northern Ireland and/or the rest of the UK, these staff members will be required to make formal applications under the EU Settlements Scheme by 31 December
Cork Chamber Economic Bulletin contact: Michelle O’Sullivan, Senior Public Affairs Executive e: michelle@corkchamber.ie / t: 021 4530132
Further Reading Online • • •
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DBEI – Getting Brexit Ready – dbei.gov.ie Enterprise Ireland – Prepare for Brexit – prepareforbrexit.com
Irish Data Protection Commission’s - dataprotection.ie
European Commission Brexit Preparedness Notices ec.europa.eu Chambers Ireland – Brexit Information – chambers.ie
2020. This scheme launched on 21 January 2019. The Department of Foreign Affairs and Trade published information informing on migration post-Brexit. This is available on www.dfa.ie and will assist Irish business navigate any forthcoming migration issues. *The factsheet is a guidance document and as such is not fully comprehensive. The aim being to highlight the business areas that demand immediate attention in the event of a ‘no-deal’ Brexit.
www.corkchamber.ie