With around 50 working days until the end of the Brexit transition period, PwC NI's Brexit lead, Cara Haffey and the firm's overall head of Brexit, Andrew Gray discuss the implications of the point in which the UK will leave the EU customs union and single market.
Cara Haffey firstly commented: “While the negotiations are in a state of flux, this has no impact on the transition period deadline. Deal or no deal, the Northern Ireland Protocol is going to bring changes that businesses will have to manage.
"There will be customs checks and declarations needed on all goods entering Northern Ireland from Great Britain, and tariffs could apply if they’re considered at risk of passing into the EU. Businesses on both sides of the Irish Sea need to know which parts of their supply chains are affected, and how to prepare for declarations and tariff rebates. There have been a number of false starts and ends throughout the Brexit process but the deadline at the close of this year isn’t one of them.”
Cara Haffey, PwC NI's Brexit lead
Andrew Gray, head of Brexit at PwC, said: “Events of the last few days show that there is now a very clear risk that the UK and the EU do not agree a trade deal. Even if talks resume, change is coming in a matter of weeks and organisations must be ready to move people, goods, and data differently from 1st January.
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"Many of the changes will be required, irrespective of the outcome. Whether they’re making light bulbs, certifying organic wine or planning post-Covid business travel, organisations have to tackle what’s currently known and leave a margin to deal with what’s still opaque.”
Movement of goods
The end of the transition period brings new requirements when moving goods across borders. While we don’t yet have full clarity on tariffs, there are steps businesses can take now.
Andrew Gray commented: “On the goods front, businesses need to be ready to make customs declarations for all goods moving between the UK and the EU from 1st January. Many organisations will have no experience of doing this and those that have likely face higher volumes. Recognising this, HMRC has advised businesses to work with a customs intermediary.
“Questions to ask now include: how might supply chain delays impact operations and cash flow, are more staff, training or advice needed to handle the new volume of customs declarations, and do suppliers have comprehensive plans?”
Andrew Gray, head of Brexit at PwC
Movement of data
The General Data Protection Regulation (GDPR) restricts transfers of personal data to countries outside of the EU and EEA unless covered by an adequacy decision. The UK is awaiting a data protection adequacy decision from the EU.
Andrew Gray added: “It is very likely that data adequacy will not be granted. With under three months of the transition period left, there are gaps in some organisations’ GDPR considerations that must be addressed so they can operate within regulations if the EU decision doesn’t go in the UK’s favour.
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“To ensure they can continue to process EU personal data in the new year, UK businesses need to understand where the data they rely on originates, how it moves around their organisation, and the risks associated with any interruption. Then they’ll need to review and update privacy notices, contracts, and other documentation.”
Movement of people
Practical factors that businesses should consider now, if they haven’t already, include applying for a sponsorship licence. To help support their people and avoid unnecessary future employment visa costs, they can communicate with eligible EU National employees about applying to the EU Settlement Scheme.
Andrew Gray continued: “Priority areas for organisations should be understanding how dependent they are on cross-border workers, ensuring those people have the right permissions to work, and planning to mitigate the impact of any delays.
"Of course, we’re not just talking about people here - goods can’t move themselves so businesses have to ask things like does the driver of our phone parts shipment or our chemicals tanker have the right paperwork to cross the border from New Year’s Day?”
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