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A brief history of Brexit

May 01, 2018
Time is running out for a smooth Brexit, but how did we get here?

The UK people voted to leave the EU by referendum on 23 June 2016 by a majority of 51.9% to 48.1%. Article 50 of the Treaty of Lisbon, the mechanism by which the UK must leave the EU, was triggered by UK Prime Minister Theresa May on 30 March 2017. This gives the UK two years to leave the EU, which means the UK’s departure date has been set as 29 March 2019. In this edition, we look back at why the referendum was held in the first place and what’s happened in the negotiations so far.

Why was there a vote?

Since the economic recession of 2008 and the crisis in Greece, the UK people have questioned the benefits of remaining in the EU – particularly when the UK economy remained relatively strong. Growing EU immigration into the UK and increasing EU regulation were also contributory factors to the growing anti-EU sentiment.

What were seen as anti-European parties enjoyed a rise in popularity in the UK in 2012 and MPs demanded that the then-Prime Minister, David Cameron, announce an EU referendum to help fend off the anti-EU challenge. In 2013, Mr Cameron said that he would hold a referendum on EU membership if the Conservative party won the 2015 election. They did, and here we are.

What’s been happening?

Brexit talks started in Brussels on 19 June 2017, headed by David Davis (UK) and Michel Barnier (EU). There has been several rounds of negotiations so far. Teams from the EU and the UK meet for around one week at a time, and the timetable for talks has two phases. The aim of phase one was to reach agreement on the rights of citizens, the financial settlement the UK will need to pay on leaving the EU, and the border in Northern Ireland. While it was hoped last October that the talks could move onto phase two, where the future trade relationship would be discussed, this was delayed until December when some progress was reported.

At the moment, talks continue and there is no agreement on the future trade relationship (phase two). The UK has agreed that a hard border must be avoided on the island of Ireland, but has not put forward sufficiently clear proposals as to how this would occur. A transition period, which is a grace period for businesses and people to transition to Brexit, has been agreed as the period up to 31 December 2020. This is conditional on a Brexit treaty being signed, however. If no deal is reached, there will therefore be no transition period.

The EU wants to reach an agreement on trade by October 2018, which will give just six months to legislate for this agreement. All eyes are on Brussels as we edge closer to 29 March 2019.

Cróna Brady is a Manager in Public Policy and Tax at Chartered Accountants Ireland. She previously worked for Accounting for Good in Sydney, Grant Thornton and KPMG.  Cróna qualified as Chartered Accountant in 2009 and is also a Chartered Tax Adviser.