Brexit: a timeline

Nov 05, 2019
The past few weeks have seen a significant amount of development in the realm of Brexit. Akriti Gupta brings us through the recent happenings.

17 October 2019

Following intensive negotiations, a Brexit deal was agreed on between the United Kingdom (UK) and the European Union (EU), with the commercial elements focusing on issues of customs and VAT.

Customs
Republic of Ireland to Northern Ireland
No customs obligations apply if you move your goods from Northern Ireland (NI) to the Republic of Ireland (Ireland), or vice versa, nor are there restrictions on quantities moving.

Northern Ireland to Great Britain 
No customs obligations apply here as NI is part of the UK customs territory.

Great Britain to Northern Ireland 

Goods moved from Great Britain (GB) to NI will not be subject to customs obligations unless the good is “at risk” of being moved into the EU afterwards.

In such cases, customs will be charged when goods move from CB to NI with rebates available if the goods remain in the UK and are not transmitted onwards to the Republic of Ireland or elsewhere in the EU. 

VAT
NI will remain aligned with EU VAT laws. However, the UK will keep the VAT revenues collected in NI. 

For example: A trader in Ireland purchases goods to the total value of €10,000 from NI. The NI company zero rates the goods supplied to Ireland. The Irish trader then self-accounts for VAT on the reverse charge basis at the 23% rate applicable in Ireland (€2,300). In most cases, the Irish trader can also then claim an input credit of €2,300. The status quo remains, and no cash flow issues arise between Ireland and NI. 

It’s important to note that the proposals set out that the UK may apply VAT exemptions and reduced rates that are applicable in Ireland to supplies of goods taxable in NI. 

19 October 2019

Upon reconvening on 19 October, the UK House of Commons voted in favour of the Letwin Amendment, which enables the UK to withhold approval for the Brexit deal, until legislation to implement the deal has been passed by the government. 

The UK Prime Minister Boris Johnson officially requested another Brexit extension from the EU until the end of January 2020. This is in line with the terms of the Benn Act, passed in September, to ensure that the UK government does not leave the EU without a deal. The EU is currently considering the extension but will need the consent of all EU27 member states to grant it. If the EU refuses to grant the UK a delay to Brexit, then the UK Parliament has until 31 October to pass a deal and the associated legislation. 

22 October 2019

The UK Parliament’s bid to hold a ‘meaningful vote’ – a vote within the House of Commons on a government motion to approve the Withdrawal Agreement – was rejected by the Speaker of the House, John Bercow. The UK government also published the full text of the EU Withdrawal Agreement Bill later that day.

That night, UK MPs voted to approve the Withdrawal Agreement Bill in principle on its second reading. However, they simultaneously rejected Prime Minister Boris Johnson’s proposal to push the Bill through Parliament within an accelerated three-day timeframe. 

Taoiseach Leo Varadkar has confirmed his support for EU Council President Donald Tusk’s proposal to grant the UK an extension to the Brexit process. Meanwhile, the EU27 member states are currently considering the request. 

(The outcome of the EU extension was still unknown at the time of writing. An extension was granted and an election in the UK has been called for 12 December.)