January 31st is quickly approaching, which means Brexit day is just around the corner. The past 3 years have been filled with uncertainty surrounding the UK’s official withdrawal from the European Union (EU), but now that the date is here what happens next?
What exactly is Brexit?
In 2016 the United Kingdom voted to leave the European Union, with a leave vote of 51.9%. This triggered Article 50. Originally the UK was due to formally leave the EU on March 29th, 2019 however, the withdrawal agreement was rejected by MP’s on numerous occasions and several extensions were granted by the EU. Following the general election in December, the cabinet voted in favour of the latest withdrawal agreement, which will enable the UK to meet the January Brexit deadline.
What happens after Brexit?
On 31st January 2020 at 11pm the UK will no longer be a member state of the European Union. Within the withdrawal agreement terms were included to allow the UK to enter a transition period, which will see the UK following EU rules despite no longer being included. This will allow the government and businesses to gradually adjust to post-Brexit life. By avoiding a sudden change to laws, regulations and rules it is hope that any potential damage caused by Brexit will be minimised.
This will also provide the government with a negotiation period, so that post-Brexit trade deals and terms can be agreed. The deals cannot be arranged until the UK leaves the EU, so the transition period will form an important part of the post-Brexit business landscape.
How long will the transition period last?
The transition period is currently scheduled to end on 31st December 2020, which is much shorter than the original 2-year period scheduled. Although, the transition period can be extended by up to 2 years, if the UK and the EU jointly agree before 1st July 2020. Boris Johnson has indicated that the UK will be looking to arrange a relatively loose free trade agreement, despite the UK not being part of the single market and customs union. If no deal is reached during this period, the UK would need to conform to security and trade terms laid out by the World Trade Organisation.
Which laws will stay the same?
Despite the uncertainty, there are several aspects of EU law which will remain unchanged here in the UK during the transition period. For example, any EU citizens arriving in the UK and also UK citizens arriving in the EU, will be able to enjoy freedom of movement rights. In addition, the existing EU trade deals will still be in operation, although it will be possible to negotiate future trade deals.
What are the key implications of Brexit?
The main challenge businesses across the UK will face following Brexit is untangling the regulatory framework, as in many cases laws will change. The previous EU laws will need to be transformed into UK law, although these could stay the same. The key areas which will need to be navigated are supply chains, customs tariffs, the workforce and potential economic issues. The exact impact of Brexit will vary from sector to sector, although with so many businesses relying on the EU the impact is potentially very large.
If you are a business owner, it is important to consider and prepare for the potential scenarios following the Brexit transition period. Here at BusinessComparison we can provide expert comparison services to help you find the best deals available on the market, for everything from business loans to bank accounts.