While a transition period will take effect until 31 December 2020 and further trade or relationship deals may be done with the EU in that time, a ‘No Deal’ Brexit on 31 December 2020 remains possible.

The following reflects a best available projection of likely impacts upon business following Brexit. It cannot be comprehensive, particularly as many aspects of Brexit remain unknown and unpredictable. However, businesses may find the following articles useful when formulating their Brexit plans.

Nature of a 'No Deal' Brexit

What does an EU border mean for the UK?

Mitigation options for businesses in 'No Deal' Brexit scenario

The future of UK trade in a 'No Deal' Brexit scenario in December 2020

Key impacts upon UK Based Business in a ‘No Deal’ Brexit scenario

Eight ways Brexit will affect businesses

The implications of Brexit are far-reaching. Our sector specialists can help you understand how Brexit will affect your organisation.

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Wider marketplace and commercial issues Many businesses are already experiencing changes in the labour market and currency effects. Cost and availability of certain supplies/ goods may change substantially.
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Compliance with future tariff and trade requirements Importers and exporters may need to have measures in place to comply with additional administration and to pay additional tariffs.
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Period of regulatory and legal uncertainty New UK regulations are likely to replace EU law and bring into effect future trade arrangements. Legal uncertainty is likely while these changes bed in, in both the period up to 2021 and beyond.
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Staff and employment requirements may change EU citizens working in the UK and UK citizens working abroad may face additional requirements for work, residence and travel, principally after 31 December 2020.
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Supply chain issues Supply chains may be affected by tariff and country of origin requirements. Where goods contain constituents from multiple sources, identification of country of origin rules may change.
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Changes in sources of funding EU funding is likely to cease. Funding (and administrative requirements in relation to it) for certain sectors may change.
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Border issues Businesses dealing with or dependent upon cross-border transit may face additional hurdles.
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Issues around brand names and designs Rights holders will need to apply for separate UK trade mark/ designs as well as EU rights once the UK has exited the EU. The coverage of existing rights will change.

 

Brexit timeline: key dates

  • 23 June 2016
    EU Referendum

    The people of the UK voted for a Brexit from the EU.

  • 29 March 2017
    Article 50 notice

    The formal withdrawal process was initiated by a notification from the UK government to the European Council.

  • December 2017
    Negotiators agree on main withdrawal terms

    Negotiators reach agreement on main withdrawal agreement terms representing sufficient progress to allow negotiations of a future UK/EU relationship.

  • December 2018
    Draft withdrawal agreement approved in principle by EU

    Draft versions of a withdrawal agreement and a political statement on a future relationship approved by the EU 27 member states and the UK government, not approved by UK or EU parliament.

  • January 2019 - March 2019
    Draft withdrawal agreement rejected

    The Draft withdrawal agreement was defeated three times by the UK parliament.

  • 22 March 2019
    UK extends Brexit deadline to 12 April 2019
  • 29 March 2019
    Original exit date
  • 11 April 2019
    UK extends Brexit deadline to 31 October 2019
  • 23 May 2019
    UK to hold European Parliament Elections
  • 17 October 2019
    EU agrees an adjusted withdrawal agreement with a revised political declaration.

    Subsequently, this version of the agreement did not make it through the UK parliament.

  • 28 October 2019
    EU extends Brexit deadline to 31 January 2020
  • 12 December 2019
    UK General Election returns a conservative majority based upon a manifesto commitment to implement the adjusted withdrawal agreement
  • 31 January 2020
    UK will leave the EU at 11pm UK time
  • May 2019 – 31 December 2020
    Transition period for EU/UK relationship and period of modification of UK law if Withdrawal Agreement approved 

    During the transition period, there is likely to be limited change to UK/EU relationships although the UK will not participate as a full member of EU bodies. The UK will be able to negotiate free trade agreements with other countries and trade blocks. The UK and EU will seek to reach final agreement on a future partnership/trade agreement to take effect on 31 December 2020. Although extensions could in theory be agreed between the parties, UK government has stated that no further extensions will be sought. 

    Under current proposals, UK government ministers will have powers to make new law (without approval of parliament) to give effect to the withdrawal agreement and to fill any gaps left by the disapplication of EU law. UK Government will also be entitled to negotiate and enter free trade agreements with the EU and other custom blocks (without approval of parliament).

     

     

  • 31 December 2020
    End of transition period

    Transition period expires and UK/EU relationship likely to be based on the terms of any future partnership/trade agreement which can be reached or will take effect as a 'No Deal' exit.

Brexit FAQs

When will Brexit happen?

The UK is expected to exit the EU on 31 January 2020.

What is being negotiated?

The UK government and the EU have negotiated a withdrawal agreement and potentially will negotiate thereafter a future relationships agreement and a future trade agreement.

Key issues in the withdrawal agreement, if approved and unchanged, include the following:

A Transition Period

The future Ireland/Northern Ireland settlement including border arrangements

  • The UK will respect its commitments under the Good Friday Agreement including its commitment to avoiding a hard border.
  • Northern Ireland will remain within the UK customs area, ultimately therefore trading with the rest of the world (including EU) on the basis of the UK's trade requirements.
  • However, goods imported into Northern Ireland from the UK or other non-EU source will be subject to EU tariffs unless it can be shown that they are not at risk of being transferred on to the EU.
  • A joint Committee will be formed between UK and EU during the transition period to set rules for identifying when goods are not at risk of being transferred on to the EU.
  • In relation to certain other regulatory matters (including state aid and VAT) Northern Ireland will align with EU rules.
  • UK/Ireland agreements can be reached to allow free travel across the border for individuals (the Common Travel Area).

The future arrangements for EU citizens in the UK and UK citizens in the EU

  • The objective should be to provide reciprocal protection for EU and UK citizens to enable the effective exercise of rights based on past life choices (e.g. to live or work in other countries).
  • Entitlement to rights (being EU citizens’ rights) will be assessed at leaving date.
  • Citizens legally residing in UK/EU (and those living/working across a frontier) at the end of the transition period will continue to be permitted to do so.
  • Family members will have rights to join such citizens.
  • Applications for settled status will be smooth and streamlined.
  • Those with permanent residence will not be charged for applications for settled status.
  • EU Social security coordination will continue for such citizens.
  • Citizens’ rights will be enshrined in primary legislation in the UK, will be directly enforceable before the UK courts and the UK courts will have due regard to the CJEU decision on citizens’ rights.
  • The UK will set up an independent body to monitor the implementation and application of these rights under the agreement.

The size of the final financial payment to be made by the UK to the EU

  • A methodology has been agreed to calculate the UK’s ongoing contributions to and return of funds from the EU.
  • The UK will continue to contribute to the EU for 2019/20 (the Transition Period) as if it was a member state.
  • The UK will remain liable for its share of the EU’s contingent liabilities at the leaving date.
  • There are specific provisions for the EIB, ECB, refugee facility and European Development Fund.
  • Space assets are excluded, the UK will no longer participate in the EU space program.

Brexit without a deal: how will Brexit affect trade?

If no UK/EU future relationship agreement is reached at the end of the transition period, the UK may be able to trade with the EU nations on World Trade Organisation terms. The impact would vary substantially across different sectors. Agricultural and automotive sectors may face particular challenges. 

Tariffs for goods imported and exported would increase costs and may cause administrative obstacles to trade.

There may be obstacles to supplying services to EU businesses/individuals including prohibitions in some circumstances.

The movement and employment of individuals may become more difficult.

Some current (non-EU) world trade agreements may fall away. Trading with non-EU countries may change to involve additional tariffs and other obstacles.

The UK may be able to negotiate bespoke trade agreements with certain nations. UK government has already reached agreement on a number of such deals in principle and is working on others.

A future relationship and potentially a trade deal will be negotiated either before the end of the transition period, or in the period after the transition period.

What are the legal implications of Brexit?

EU law will be disapplied from the end of the transition period although existing EU laws will be imported into UK law such that no sudden change is expected. Substantial new UK regulation may be introduced to replace it (over a period to 2021 or beyond). Court judgments may be required to clarify the effect of such changes.

The UK government, UK parliament and the devolved administrations face the challenge of disentangling the UK regulatory framework from EU law, while balancing the need to maintain a robust legal and regulatory system.

The disapplication of EU law will be implemented by the Government ‘Withdrawal Act.’ This will come into force if there is 'no deal' after the transition period if no alternative deal is reached.

The process for restructuring UK law includes the following:

  • Repeal of the European Communities Act (ECA). The ECA gives direct effect to all EU law in the UK and provides for the supremacy of EU law where it conflicts with UK law. Repealing this Act separates UK and EU law from a domestic perspective.
  • Transform applicable EU law into UK law. It is likely that this will need to substitute any EU institutions playing a role in the administration of such EU law with competent UK institutions.
  • End the jurisdiction of the European Court of Justice in the UK. Once the court is no longer available as a point of reference for EU law the UK courts will have to decide whether to give any note to decisions it has made in the past or future decisions when considering matters which derive (or derived) from EU law.

How can Burges Salmon help?

The legal and commercial implications of Brexit are potentially very far-reaching. We are issuing sector specific guidance which we will continue to review and develop as more detail becomes available on the approach being taken to future relationships and future trade negotiations by the EU and UK and the impact on the UK economy.

We’ve already prepared briefings in areas as diverse as employment law, intellectual property, food and farming and transport which should help inform the decisions you’re making for your business.

If you would like further information on how Brexit may affect you or your organisation then please get in touch.

Key contact

Chris Seaton

Chris Seaton Senior Partner

  • Senior Partner
  • Employment
  • Partnerships

International Trade

International Trade

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