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Brexit: What now?

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Rouse Partners

On 31 January 2020, the UK left the EU. In this article we look at what happens next and what this will mean for UK businesses and individuals.

What will happen next?

The Withdrawal Agreement Act (often referred to as the ‘Brexit Deal’) was passed and as a result, the UK left the EU on 31 January 2020. This means the UK has now entered a transition period which is scheduled to end on 31 December 2020.

The key topics for the government during the transition period will be trade talks and coming to agreements on the political, cultural and security arrangements between the EU and UK.

What will this mean for UK businesses?

During this period the UK will remain in the EU Customs Union and Single Market. Therefore, there will be little noticeable change regarding imports and exports.

However, businesses engaging in business to business transactions with EU clients should note the ‘New VAT rules from 1 January 2020‘ which still apply to them.

HMRC is also advising businesses to:

  • make sure they have a UK Economic Operator Registration and Identification (EORI) number
  • prepare to make customs declarations.

HMRC has posted letters to 220,000 VAT registered businesses advising them on the current position.

What will this mean for individuals?

During the transition period many agreements between Britain and Europe will remain the same. This means that:

  • All travel arrangements and holidays between January 31 and December 31, 2020, will be unaffected. British citizens will not need a visa to travel to EU countries, but the European Commission has said that from 2021, travellers will need to apply for an ETIAS (European Travel Information and Authorisation System) visa waiver.
  • All bank trading agreements and deals bought from EU financial firms will be protected during the transition period.
  • British and EU citizens will continue to benefit from free movement during the transition period. After the transition period, Britons living in EU member states will have their residency rights safeguarded, subject to completing whatever administrative procedures are imposed by their national government.

Will the transition period be extended?

The Withdrawal Bill that the government published following the General Election majority win, rules out any form of extension to the transition period.

The UK will therefore, begin a new relationship with the EU in January 2021, or exit the transition period without a trade deal. Without a trade deal the UK would revert to a default World Trade Organisation (WTO) position and face the prospect of tariffs on exports to the EU.

There has been concern that the transition period does not provide enough time to formalise all necessary arrangements, particularly on the trade side. So we will be keeping track of progress throughout the year and what this means for businesses and individuals.

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This information has been produced by Rouse Partners LLP for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of this information is accepted by Rouse Partners LLP. In all cases appropriate advice should be sought before making a decision.

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