Almost half of firms here say they remain concerned about new customs compliance and tariffs which look set to be brought in next year following the end of the UK’s transition period.
Changes to the VAT rules in goods (19%) and uncertainty around continuing access to EU free trade agreements (17%) also represented significant concerns for some companies, which took part in KPMG’s webinar ‘Preparing for VAT and Customs Changes’.
Looking at the impact of the UK’s exit from the EU companies being ready for changes being put in place, in response to a question around the level of Brexit preparedness, a total of 27% said they are awaiting further clarity around how the Northern Ireland Protocol will apply before commencing any Brexit preparations while just under half (48%) have at least begun basic preparations such as setting up Brexit working groups and reviewing supply chains.
“While there is still the possibility that some type of ‘technical extension’ to the transition period might be agreed on the 11th hour, if a deal is on the table, it is essential that Northern Ireland businesses carry out as much planning and operational readiness as possible before January 1, 2021, notwithstanding the fact that several key issues concerning operational aspects of the NI Protocol are still to be clarified,” Johnny Hanna, partner in charge of KPMG, who chaired the webinar, said.
“The main focus of our webinar was to highlight the customs and VAT issues businesses needed to think about under various different trading scenarios.
“It should also have highlighted the importance of the UK and EU reaching a deal for businesses in Northern Ireland, not just in terms of minimising the level of complexity (and cost) associated with the Irish Sea Border but also for the all island economy given continuing uncertainty around matters such as rules of origin and continuing access to free trade agreements (FTAs)."
Frankie Devlin, indirect tax partner at KPMG, said: “It is unsurprising that customs and VAT compliance are a real worry for Northern Ireland businesses as they prepare for the end of the transition period. The changes to both are complex and require in-depth analysis on a case-by-case basis to ensure disruption to trading is minimised from January 1.
“Exporting from and importing to Northern Ireland is going to be totally transformed so it is vital that every business knows how it will impact them and puts in place strategies to overcome any difficulties. Importantly, Government training funding is available for businesses and we would encourage businesses to look into this to help with training requirements.”