Brexit: Is it really going to happen on 31 January 2020?
17 January 2020 – At present, it is likely that the UK will leave the European Union on 31 January 2020 with a withdrawal agreement. The approval of this agreement by the EU is virtually certain following the publication of the EU on 13 January last. The withdrawal agreement provides, among other things, for the entry into force of a transition period.
What does this transition period mean for you?
From 1 February 2020, the UK will no longer be part of the EU. This is when the transition period begins. In principle, nothing will change for you during this transition period, as the United Kingdom must continue to comply with EU legislation. During the transition period, the United Kingdom will remain a member of the Customs Union and the European Single Market, so you may continue to do business with the United Kingdom during the transitional period as you would normally do.
What happens after the transition period?
The transition period will end on 31 December 2020. Until then, it is up to the UK and the EU to conclude new trade agreements, which will enter into force on 1 January 2021. The United Kingdom has got until 30 June 2020 to apply for an optional one-off extension of the transition period for a maximum period of two years. However, the British Prime Minister Boris Johnson has already announced that he does not want to use this option.
The United Kingdom is determined to conclude new trade arrangements with the EU before the end of the transition period. However, it is questionable whether this will be possible without the United Kingdom applying for an extension. The reason for this is because the UK has to make new trade arrangements not only with the EU, but also with other countries, something that has taken many years and a great deal of effort on the part of the EU.
There is a risk that the EU and the United Kingdom do not succeed in reaching new agreements to take effect after the transition period. If the transition period is ended without new trade arrangements, Northern Ireland will for the time being continue to follow the rules of the EU Single Market, including VAT and excise duties.
Whatever happens to the trade agreements, you will be faced with far-reaching changes at the end of the transition period. We will therefore be happy to keep you informed of developments regarding the trade agreements as soon as more information is available.
Want to know more?
Would you like to know what Brexit means for your company and how you can prepare yourself for it? Please contact Raimo Kool by e-mail or telephone: +31 (0)88 277 15 05 or Eline Polak by e-mail or telephone: +31(0) 88 277 2325. For specific questions about the impact of Brexit on your staff, please contact Alexander Rasink by e-mail or telephone: +31 (0)88 277 1615. They will be happy to help you.
For entrepreneurs who do business directly or indirectly with the United Kingdom, Brexit has major consequences. Mazars would like to inform you about the various developments in this area.