Dáil Éireann Debate, Thursday - 28 February 2019
9. Deputy Joan Burton asked the Minister for Finance the effect of a no-deal hard Brexit on customs clearance and other requirements for importing from the UK and Northern Ireland, respectively; his views on the implication of a no-deal hard Brexit for VAT and business; and if he will make a statement on the matter. [9967/19]
View answerThe Minister discussed Rosslare with Deputy Browne. Will the Minister provide details on the recruitment of customs clearance officials? All of these businesses will have to be revived in the context of even a difficult Brexit. While we are all still hopeful there will not be a hard Brexit, we will not know for a couple of months. There seems to have been relatively little recruitment overall of customs officials. The Minister might give us the details.
When the UK leaves the EU, it will become a third country from a customs perspective and the free circulation and free movement of goods between the EU and the UK will end. This will increase substantially the number of businesses that will have to complete customs formalities and other related obligations for trade with the UK and through the UK landbridge to the EU. This will present a significant challenge for many of those businesses which, up to now, have not had any experience of third country trade and customs formalities.
I am advised by Revenue that a priority for it is to facilitate the efficient movement of legitimate trade in the new trading environment. It has undertaken an extensive trader programme and has written to all businesses that trade with the UK, highlighting the Brexit-related Revenue supports available to them, and it has invited them to a series of Brexit seminars where it outlined customs procedures and the steps that businesses should be taking to prepare for Brexit.
Revenue’s focus to date has been on east-west trade with the UK. As the Deputy will know, the Government has made it clear it is committed to avoiding the return of a hard border on the island of Ireland. In the event of no deal, there will be intensive discussions between the Government, the European Commission and EU partners regarding the customs formalities necessary for the movement of goods north to south.
In regard to VAT, under existing rules, when the UK becomes a third country, VAT on import will be chargeable at the point of importation unless the importer is approved to use the current deferred payment system, which allows approved traders to defer payment of certain charges, including customs and VAT at import, until the 15th of the month following importation.
I have included a measure in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019 to allow for postponed accounting for import VAT. This is being introduced to alleviate the immediate cash flow burden for Irish traders arising from Brexit. Under this system, importers will not pay import VAT at the point of entry but will instead account for import VAT through their bimonthly VAT return.
Figures released last week by the Revenue Commissioners show that only 117 customs officers have been hired as part of the 3,000-person recruitment campaign. I simply do not understand that low volume. Taking into account the different ports and airports we are aware of, not to mention towns on or near the Border, 117 people would barely fill a one-day shift cycle at one large port or Border town. In Dundalk, the old customs premises seem to be pretty much totally refurbished, and the Minister might confirm this, given it is what everybody who has looked at this believes and is what everybody has been told. This is in the context of the changes that may happen post Brexit. The Minister might comment.
The commitments I gave in regard to figures for additional staff for the Revenue Commissioners were that an additional 400 would be recruited by the end of this March, and we will deliver that. A further 200 will then need to be recruited and, in turn, we will deliver that as well. The 3,000 to which the Deputy referred might be the number of people who applied for these roles. There was a high level of interest in this work and we have been able to build up a large panel of employees to do this work.
In regard to what the Deputy said about Border towns, in particular, we are not planning to have staff in place to facilitate the development of infrastructure on the Border. To address her point on the ports, it is worth bearing in mind that the additional staff we are talking about recruiting for Rosslare Port will mean a significant increase in the number of staff it would have available.
I am conscious of the fact that the Government is recreating a customs clearance industry and that particular new arrangements are being established which will utilise technology. Nonetheless, at each service point for Border-based transactions when crossing to or from the United Kingdom, there will have to be some kind of oversight, preferably electronic, and there will also have to be a physical presence with people being available to conduct inspections as required.
The same pertains to other people and veterinary inspectors in particular. During the debate on the Bill, there has been very little information from the Government, perhaps because the Minister himself has not been taking part. He has, however, been quite forthcoming this morning. Businesses along the Border are desperately worried. The head of Dublin Port showed the new booths there the other night on television. No one along the Border, though, knows what is going to happen. People are guessing.
We are not planning to have the same infrastructure in place at or near the Border as in Dublin Port. That is exactly what we are trying to avoid at the moment. On recruitment and the resources sought by the Revenue Commissioners to deal with the new customs procedures to be put in place, I have made those resources available. I gave an overview on Tuesday evening of the different sections of the Bill I am responsible for. As I stated some weeks ago in committee to Deputy Burton and other Deputies, if the Revenue Commissioners need additional resources beyond what I have made available to them, then I am very willing to engage on that. Deputy Burton made a valid point. This is the creation of a significant amount of new activity. I refer to the work of customs agents in particular. That work is going to be important in the days ahead and it is the kind of work that has not happened in our economy on this scale for decades.
