A survey by customs clearance platform Declaron has found that almost two-fifths of businesses trading with the UK have failed to make a plan for Brexit.

And half of the businesses surveyed said they are struggling to understand the new customs requirements that will come into effect on January 1 2021.

The primary reason given by those Irish businesses that have yet to start planning for Brexit is that there’s no trade agreement between the EU and UK, making it more difficult to prepare.

Chief executive Michael Nolan said: “I know that businesses are concerned about whether there will be a trade agreement in place — but that should not stop preparation for the one guaranteed task they will have to deal with, and that is creating and submitting Customs declarations. 

“There are certain steps that every business must now take to be able to import and export with effect from January 1, and inaction now puts the efficiency of their trading with the UK at risk.”

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The research also showed that 54% of Irish businesses trading with the UK do not understand the new customs clearance procedures. Lack of knowledge or planning was particularly prominent amongst SMEs, with less time and resources to dedicate to the challenge.

Lack of certainty around tariffs and rules (40%) was the number one Brexit issue cited by those interviewed. The unprecedented effects of Covid-19 were also cited as a big barrier, with almost 90% of medium and large businesses saying it had affected their planning.

Declaron is the result of a partnership between BDO and Fexco which provides access to custom clearance experts and was designed to future-proof against compliance stress and remove the need for an in-house clearance department.

BDO partner and Declaron director Carol Lynch  (pictured) warned that Irish businesses displayed a “critical misunderstanding” about what an eventual trade agreement would solve from a customs point of view.

“Irish companies are sleep walking into a trade agreement trap,” she said. 

“Even when a trade agreement is concluded, there will still be a requirement for import and export declarations. The agreement only means that customs duties may not be payable. Compliance obligations actually increase rather than decrease. 

“The delay in the service agreement being finalised cannot be seen as reason to delay preparations.”

She urged those businesses to find out more and assess if Declaron is a suitable option for them, with just seven weeks to the January 1 deadline, adding that full information is available on their website here.