Brexit Bulletin, 4 December 2020

Dec 03, 2020

With just about four weeks left to the end of the Brexit transition period deadline, the window for a deal between the EU and the UK is rapidly closing. With the three main areas of divergence still remaining unresolved, the EU seems to be moving their focus to contingency planning instead. Read today’s bulletin to find out more on recent negotiation developments, and why “fish and chips” have been dominating the latest headlines. Additionally, you can access the Northern Ireland Office’s new Brexit readiness checklists for businesses. You can also view the details on the Strategic Banking Corporation of Ireland’s extension of the Brexit Loan Scheme.

“Fish and chips”- Brexit negotiators have their plates full as talks enter final phase

With just 27 days to go to the final Brexit deadline, EU and UK negotiators are hurriedly trying to agree a deal. The very real deadline of 31 December 2020 is looming, and it seems that the timetable for Brexit negotiations has been replaced with daily “bit-by-bit” negotiations. However, while the EU is still holding out hope to reach an agreement, it has been reported that the window for a deal between the EU and the UK is rapidly closing, and the EU are planning to move their focus to contingency planning instead. Meanwhile, with current Brexit trade talks still stuck on fishing, governance, and a level playing field, patience seems to be running short on both sides. UK Minister for the Cabinet Office Michael Gove has been reported as saying this week that the EU is asking too much.

A fishy affair…

Even with the EU offering to return to the UK 15-18 percent (worth €117m) of the value of fish stocks currently caught by EU fleets in UK waters, the issue on fisheries is far from being resolved. As per recent reports, the focus seems to have moved from quota shares to issues of “access”. Last-minute Brexit trade talks are continuing in London with fishing rights remaining an "outstanding major bone of contention," according to the UK Foreign Secretary Dominic Raab. While a definitive answer is yet to emerge, Irish Foreign Minister Simon Coveney has warned that if the UK could not compromise on fishery access the entire deal could potentially fall through.

Potato supply chains will be impacted

With disruption to the Irish potato supply chain and other impediments to the agri-food sector dominating the latest headlines, the Irish Department of Agriculture, Food and the Marine has warned businesses that all British potatoes, including seed plants, will be banned from importation into Ireland once transition arrangements end on 1 January 2021. Even in the event of a trade deal, the Department has told growers, processors, and distributors that the flow of British potatoes to Ireland will stop on 1 January 2021, and not be restored for months, because Britain’s application to export potatoes must go through EU checks.

Minister for Agriculture, Food and the Marine Charlie McConalogue has also expressed concern that a significant number of agri-food, forestry and fisheries firms that have traded with the UK over the past two years are still not ready for both the transition period deadline and the new customs arrangements coming into effect on 1 January 2021. In this air of uncertainty, businesses must not lose sight of their readiness goals and continue to prepare, irrespective of the outcome – was the overarching message.

Auto-enrolment deadline for XI-EORI extended until 14 December

Traders based in Northern Ireland, or those based in GB that need to make declarations in NI, will require an EORI number starting with XI to access EU systems and continue trading from 1 January 2021 onwards.

For businesses that have yet to register with TSS, HMRC will automatically issue you with EORI numbers starting with XI if you sign up by 14 December 2020 and enter your GB-EORI number into the system. Please make sure your supply partners are registered with TSS to ensure their EORI process is triggered

 

Northern Ireland Office publishes Brexit readiness checklists for businesses

The Northern Ireland Office in conjunction with NIBusinessInfo.co.uk has published a checklist for businesses in Northern Ireland to help them prepare for 1 January 2021. “Brexit Transition: Actions Northern Ireland businesses can take now" provides a list of 10 actions that Northern Ireland businesses should take now, regardless of the outcome of discussions with the EU. These include:

  • conducting a risk assessment to establish where changes will be needed
  • registering for the Trader Support Service
  • acquiring an EORI number
  • finding out the commodity code for goods you buy or sell
  • practical steps around communicating with hauliers, business partners and suppliers
  • making a list of all the data flows into and out of the business, and
  • considering the impact of Brexit on people movement.

 

Guidance for NI’s Professional Services Sector

The Northern Ireland Office has set out important steps businesses operating in the professional services sector should take to prepare for the changes that Brexit is going to bring next year. The guidance offers advice related to employing people; recognition of professional qualifications; reporting; data protection and data transfers; “.eu” top-level domain names; the provision of services cross-border or establishing and operating a business in the EU; and advice about checking relevant national frameworks in EU jurisdictions. 

Business are advised to take the actions they can and should take now to get ready, regardless of any further agreement reached with the EU. Read the guidance.

Additional guides will be published in the coming weeks, which we will continue to bring to you.

 

 UK audit registration – after the Brexit transition period

After 31 December 2020, audit registration in the UK will continue without interruption for individual statutory auditors (“responsible individuals”) registered by Chartered Accountants Ireland, which has been given the status of the Institute as a Recognised Supervisory Body (RSB) in the UK. This is regardless of whether the responsible individual is based in the UK or Ireland.  There will be no change to the UK audit registration of the majority of audit firms registered in the UK by Chartered Accountants Ireland, regardless of whether the audit firm is based in Ireland or the UK.  Audit firms currently registered in the UK by Chartered Accountants Ireland can retain UK audit registration after 31 December 2020 if the UK firm ownership rules are met. 

The ownership rules for a UK-registered audit firm after 31 December 2020 will require that the majority of the voting rights on the ownership body and management body of the firm are held by:

  • Individuals holding an audit qualification from a UK RSB (including Chartered Accountants Ireland)
  • Audit firms approved by a UK RSB (including Chartered Accountants Ireland)
  • Individuals who hold EEA qualifications, who have passed or applied to sit a relevant aptitude test by 31 December 2020

The change in the ownership rules impacts firms who count EEA-qualified auditors (who are not qualified by a UK RSB) and EEA audit firms in their majority of qualified owners and managers.  From 1 January 2021 the qualified majority of owners and managers can only include EEA auditors (who are not qualified by a UK RSB) if the EEA auditors have applied for, or passed, a relevant aptitude test before 31 December 2020.

 

UK government publish post-Brexit guidance on public procurement

 The UK Department of Business, Energy & Industrial Strategy has issued letters to businesses, urging them to focus on new rules regarding public procurement. The way that opportunities to supply the UK public sector are advertised is about to change. From 23:00 on 31 December 2020, the UK will publish information on public sector contract opportunities in the UK, on the new Find a Tender Service (FTS). A few points to note on the FTS:

  1. FTS is free to use and replaces the role of Tenders Electronic Daily, the Official Journal of the EU (OJEU/TED) for procurements in the UK.
  2. FTS will work alongside existing procurement portals such as Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI which can be used to access a wide range of opportunities to supply the public sector.
  3. Existing Contracts Finder account holders will be able to use the same login credentials for Find a Tender. You can register now in preparation for its launch on 31 December 2020.
  1. Those who wish to access public sector contract opportunities in the EU, may continue to do so via OJEU/TED.

     

  2. Information about procurements launched by UK contracting authorities before 23:00 on 31 December 2020 will be available via OJEU/TED or the existing portals mentioned above.

All enquiries can be directed to info@crowncommercial.gov.uk

 

SBCI extends Brexit Loan Scheme through 2021

The Strategic Banking Corporation of Ireland (SBCI) have now extended their Brexit Loan Scheme to be available throughout 2021 for businesses that have been negatively impacted by the effects of the UK’s departure from the EU.

This scheme currently makes available working capital lending to businesses as they seek to innovate, change, or adapt in response to the disruption brought on by Brexit. Loans under the scheme range from €25,000 to €1.5m for terms of up to three years. Loans up to €500,000 are available unsecured and the maximum interest rate under the scheme is 4 per cent.

Applications are based on a two-step process:

  1. Businesses must first apply to the SBCI to confirm their eligibility for the scheme.
  2. If successful, they can then apply for loan approval to a finance provider participating in the scheme

Full details of the scheme and application forms are available through the SBCI website.