Are you keen to keep up-to-date on Brexit but baffled by the constant stream of confusing stories? Here is a brief guide to what has happened so far:
- In December, the UK and European Union (EU) agreed an outline deal to allow the UK to negotiate a two-year transition arrangement. The aim was to give the UK until the end of 2020 to prepare for the vast and complex implications of leaving the European trade bloc. It would also allow time for a new trade deal to be worked out between the two.
- Right now, the UK and EU should be agreeing the details of a transition arrangement. But doing so is not proving as easy as it sounds and there is is a real risk that these talks will fail. If they do, the UK will have to leave the EU in March 2019.
- Hard-line Brexiteers in the UK are resisting some of the decisions made, or implicit, in the outline agreement for a number of reasons. In particular, they are fighting against the UK joining the EU Customs Union, which would help avoid the creation of a hard border in Ireland. It would also reduce the UK’s ability to set up new trade deals with non-EU countries.
- Looking ahead, the UK has still not agreed what type of relationship it wants with the EU. The ruling Conservative Party appears more and more split between those Members of Parliament who want a clean break with the EU and those who want to limit changes in order to protect the UK economy.
In summary, it is still very uncertain how and when the UK will leave the EU. The risk to business of a so-called “cliff edge” departure in March 2019 is growing. If this situation persists until March 2018, it is likely that more companies will be forced to start implementing contingency plans. But there are a number of possible changes they will need to take into consideration:
- UK businesses would no longer benefit from EU VAT regulations, causing potential disruption to cash flow for small-and-medium-sized businesses;
- The UK is applying to the United Nations to join a 50-year old convention in order to allow its driving licences to be recognised in Europe. This means the UK would need to abide by other provisions in the convention, which includes new regulations for pedestrian crossings;
- UK airlines would lose the right to fly within the EU as well as potentially the right to fly to the EU and other countries;
- EU citizens would no longer have unrestricted rights to work and live in the UK and vice versa;
- The UK would need to amend trade deals with more than 100 non-EU countries. It currently benefits from EU deals with these countries.
John Galvin is founder and CEO of award-winning international expansion company Galvin International, which has offices in the US and UK. His firm helps clients expand globally by providing one-stop commercial and compliance services in more than 100 countries. John is a former multinational CFO with over 20 years of international commercial and finance experience, and was named Global Consultant of the Year 2016/17 at the inaugural Global Payroll Awards.
Are you keen to keep up-to-date on Brexit but baffled by the constant stream of confusing stories? Here is a brief guide to what has happened so far:
- In December, the UK and European Union (EU) agreed an outline deal to allow the UK to negotiate a two-year transition arrangement. The aim was to give the UK until the end of 2020 to prepare for the vast and complex implications of leaving the European trade bloc. It would also allow time for a new trade deal to be worked out between the two.
- Right now, the UK and EU should be agreeing the details of a transition arrangement. But doing so is not proving as easy as it sounds and there is is a real risk that these talks will fail. If they do, the UK will have to leave the EU in March 2019.
- Hard-line Brexiteers in the UK are resisting some of the decisions made, or implicit, in the outline agreement for a number of reasons. In particular, they are fighting against the UK joining the EU Customs Union, which would help avoid the creation of a hard border in Ireland. It would also reduce the UK’s ability to set up new trade deals with non-EU countries.
- Looking ahead, the UK has still not agreed what type of relationship it wants with the EU. The ruling Conservative Party appears more and more split between those Members of Parliament who want a clean break with the EU and those who want to limit changes in order to protect the UK economy.
In summary, it is still very uncertain how and when the UK will leave the EU. The risk to business of a so-called “cliff edge” departure in March 2019 is growing. If this situation persists until March 2018, it is likely that more companies will be forced to start implementing contingency plans. But there are a number of possible changes they will need to take into consideration:
- UK businesses would no longer benefit from EU VAT regulations, causing potential disruption to cash flow for small-and-medium-sized businesses;
- The UK is applying to the United Nations to join a 50-year old convention in order to allow its driving licences to be recognised in Europe. This means the UK would need to abide by other provisions in the convention, which includes new regulations for pedestrian crossings;
- UK airlines would lose the right to fly within the EU as well as potentially the right to fly to the EU and other countries;
- EU citizens would no longer have unrestricted rights to work and live in the UK and vice versa;
- The UK would need to amend trade deals with more than 100 non-EU countries. It currently benefits from EU deals with these countries.
John Galvin is founder and CEO of award-winning international expansion company Galvin International, which has offices in the US and UK. His firm helps clients expand globally by providing one-stop commercial and compliance services in more than 100 countries. John is a former multinational CFO with over 20 years of international commercial and finance experience, and was named Global Consultant of the Year 2016/17 at the inaugural Global Payroll Awards.
