Covid 19 has pushed BREXIT out of the headlines but the issue has not gone away. As the talks recommence via video link, why is a comprehensive agreement on our future relationship seem unlikely to be achieved?
- The Johnson Government made some crucial changes to the Withdrawal Agreement; the most important was the dropping of regulatory alignment as a goal. The Government is prepared to accept some friction at the borders as a price worth paying to allow greater freedom to set the UK’s own regulations. Covid 19 has also made the impact of border delays due to additional checks much less of a concern, as health checks will be instituted anyway as the lockdown is eased.
- The impasse over fishing is difficult to see resolved without some major concessions from both sides. Fishing does not represent a large percentage of the UK economy but it is an issue which cuts through to the public and one where key constituencies may be affected.
- Covid 19 has eliminated the possibility of informal chats and behind the scenes face to face meetings, which are normally key to any breakthrough in talks.
From a Tax and Social Security standpoint, this more distant relationship is likely to create major changes in VAT, Customs Duties, Corporation Tax and international social security. Every business with trade across borders or international assignees will be affected.
Primondell will be running a series of courses on the tax and social security effects of BREXIT and the end of the transitional arrangements in the Autumn.