17 Dec 2019
Getting Brexit Done
Following the Conservative General Election win, the PM intends to bring back the Brexit Withdrawal Agreement Bill before Christmas. With the Government’s parliamentary majority, it seems virtually certain that the UK will leave the EU, and highly unlikely that the long term relationship will involve membership of the Single Market or even a Customs Union.
So what's next?
Assuming the Withdrawal Agreement is approved on both sides, a transitional period would be in place until 31 December 2020.
During the transitional period, Duty and VAT arrangements for trade will continue, broadly as now. The UK would continue to follow EU rules, including any changes to EU regulations, e.g. the “quick fix” changes for VAT which are taking effect on 1 January 2020.
The purpose of the transitional period is to allow time for a new trade deal to be negotiated with the EU. However, it seems unlikely that the UK and EU will have finalised a comprehensive free trade agreement by 31 December 2020. So either the transitional agreement will need to be extended (the PM makes it clear he does not want to do this), or the UK will crash out of the EU on that date. Certainly, HMRC hasn’t removed any of its guidance on how to prepare if the UK leaves the EU with no deal.
Thus with any lingering possibility of “remain” or a soft Brexit seemingly off the table, businesses will need to finalise their Brexit Strategies before the end of 2020. This should address, among other matters:-
- Imports and exports;
- Distribution and supply chains;
- VAT registrations in other EU jurisdictions where necessary; and
- The impact on human and capital resources;
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