Brexit update Brexit update Brexit update

Since our last communication to you on Brexit in February the COVID-19 pandemic has posed unprecedented challenges and Brexit preparations have understandably fallen off, or at least down, the agenda for many businesses.

Given some important developments in recent weeks we thought it was an appropriate time to take stock of where things are and what preparations businesses can be making in the coming months.

As you will have seen from media coverage in recent weeks, there have been some significant developments on Brexit. The decision not to extend the Transition Period beyond 31 December 2020 is particularly important. Likewise the publication of papers on the implementation of the Protocol on Ireland / Northern Ireland, the UK’s plans to phase in some customs changes over 6 months, and the UK’s tariff schedule that will apply to GB imports from the EU if there is no FTA are also very important. Hence, we thought it was an appropriate time to take stock of where things are and what preparations businesses can be making in the coming months, with a particular focus on VAT & Customs actions that will need to be taken irrespective of whether an FTA is reached or not. 

In summary, they are complex and there are significant issues yet to be resolved on topics such as fisheries, level playing field commitments, the governance framework that will be needed if the UK want to have the right to diverge from EU standards, and police and security. Whilst the parties have agreed to meet weekly in July and August, current indications are that it will be later in the summer or indeed into the Autumn before it is clear if the parties are making progress in sufficient time to allow for ratification of a deal by both parties by the end of 2020. With political focus in the EU on the Commissions proposed €750bn COVID-19 Recovery Fund and the new EU budget, and challenges in building trust between the negotiating parties, there continues to be a not insignificant risk that trade will default to WTO terms from 1 January 2021. 

The key areas where major developments have taken place recently and where preparations can be undertaken at this stage are:

1. Key VAT & Customs changes
   Here we have included an up to date analysis of the key VAT & Customs changes for businesses operating on the Island of Ireland (both North and South). 
2. Get ready for Customs & VAT
   View our analysis of the key actions ROI based businesses can take now relating to VAT & Customs. Most of these will need to be taken irrespective of whether an FTA is agreed or not. 
3. Quantify exposure to UK Tariffs
   Read our detailed comments on the UK Global Tariff Schedule which will apply to GB imports from the EU if an FTA is not in place for trade after 31 December 2020. 
4. Keep a close eye on the Northern Ireland Protocol
   Access our detailed comments on the main outstanding issues in respect of the Protocol on Ireland / Northern Ireland. 

For preparations on People, Data, Company Law and the provision of cross border Services, the comments in our February 2020 Update still apply.

If you have any queries on how Brexit will affect your business, please get in touch with our dedicated Brexit response team.