Audit partner, Gerard O’Reilly contributed the Irish commentary (outlined below) for the “Views from the Eurozone” article of the January 2019 edition of the International Accounting Bulletin: A search for silver linings – uncertainty and opportunity as the UK braces itself for 2019.
Most businesses are aware of the risks from both a soft and hard Brexit. However, the implications are very different depending on the type of business you have and the type of deal done, so as a result most companies will not commit to particular strategies and dislocation until they have a clear view.
The impact for businesses based in Ireland will depend on what is being sold. The UK imports a good deal of its food requirements from Ireland. Disruption to the current ‘Just-in-Time’ supply lines will be very significant in the event of a no deal, and costly in terms of tariffs as well as time. Many will be faced with needing to invest in additional warehousing but already we are seeing suitable food and medicine storage space in UK becoming increasingly expensive or simply unavailable.
Any UK business that is regulated or in receipt of significant funding from the EU has already adapted their business model, with many locating to Ireland. In particular, we are seeing an increasing number of UK-based legal firms and individual lawyers seeking registration in Ireland to allow them to continue to practice international EU law.
Equally, we have a substantial number of enquiries from UK-based charities in receipt of EU funding looking to establish a foothold in Ireland. It is even anticipated that Ireland may see a further influx of international students receiving EU funding looking to learn English.
Many UK-based insurance companies, investment houses and financial institutions are looking to Ireland as their regulated gateway to serve EU-based clients. An area such as GDPR poses a significant risk for UK-based organisations operating across the EU and establishing an Irish office is a viable strategy.
On an individual level, recent figures released from the Irish Department of Justice have shown a tenfold increase in the number of Britons looking to become Irish Citizens and obtain Irish passports since the Brexit vote.
The biggest logistical disrupter to Ireland however is the trading of goods with other EU countries. Efficient trans UK routes are long-established and highly efficient. Alternate shipping routes are being developed but they will not match the time or efficiency of these trans UK routes.
Whilst they will likely be given favourable treatment once they land in France they could face two customs checks on entering and leaving the UK. One estimate is that a 3 minute per truck delay in Dover on the South coast of the UK would lead to a 17-mile traffic tailback! As an island economy these supply lines are vital so alternate routes, new customers and new suppliers are very hot topics for all our trading clients.