Brexit Bulletin, 20 November 2020

Nov 19, 2020

With Brexit negotiations at the chief negotiator level paused this week due to a COVID-19 threat, the wider team continue negotiations in Brussels this week. With serious divergences between the two sides creating a deadlock in negotiations, this week could be a crucial one in breaking this impasse. Read today’s bulletin to find out what are the key discussion points this week. Readers can also take the UK government’s UK Trader Support Service’s survey to help the government ascertain how businesses are preparing for the new changes starting 1 January 2021. You can also view our infographics on the top 10 things to do to prepare if you’re trading in goods and/or services.

Brexit negotiations paused due to COVID scare

Brexit negotiations have currently been paused for a short period, due to one of the negotiators in the EU’s team testing positive for COVID-19. While talks between Michel Barnier and David Frost would pause for a short period, the wider negotiating teams on either side will continue working in full respect of the health guidelines.

What is at stake this week?

Negotiations at a wider team level continue this week in Brussels. With serious divergences between the two sides creating a deadlock in negotiations, this week could be a crucial one in breaking this impasse. Speaking about the matter, Irish Minister for Foreign Affairs Simon Coveney has said that “this is the week where things do need to move”. With the clock ticking down, a lot needs to be achieved in a matter of a few days.

Ratchet clauses’

It has been reported that Monday 23 November 2020 is now a key deadline to reach agreement on the main areas of divergence. These continue to be fisheries, governance and the level playing field. However, it has also been reported that there is now a more significant focus on standards, i.e., on whether the two sides will sign up to ‘ratchet clauses’.

A ‘ratchet clause’ would attempt to make the UK align continuously in the future with the EU on regulations in the area of environmental, labour, and tax. This is currently being put forward by the EU as a concept of “shared high standards, evolving over time”. However, it must be mutually agreed. The question now is whether standards will be mirrored or the EU standards used as a baseline by the UK. There is hope that if progress is made this week, there might be some positive movement in the negotiations on this issue.

What about ratification of the deal?

With only 44 days to go to the deadline, agreement of the text of the Brexit trade deal needs to be followed by ratification for it to be legally binding. Reportedly, the vote by the European Parliament to seal a Brexit trade deal could be delayed until as late as 28 December 2020, three days before the end of the transition period, under an emergency EU plan which was put in place for the eventuality of further delays. Additionally, the UK needs to have this deal approved by Westminster.

In light of the potential COVID scare, it also remains to be seen if the EU’s chief negotiator Michel Barnier will still brief EU ambassadors this coming Friday (20 November).

 

The UK government is looking for your opinion on the UK Trader Support Service

The Northern Ireland Protocol comes into force on 1 January 2021. There will be changes to the way goods move between Great Britain and Northern Ireland. The UK Trader Support Service consortium are looking for your feedback to better understand how traders and users are preparing for the changes. In order to support us with this, please complete this 5-minute survey by Monday 23 November. Within the survey, readers can also find free training material available to support preparations for 1 January 2021.

TAKE THE SURVEY HERE

 

Look back: UK Trader Support Service webinar

Readers can also watch the Institute’s latest webinar on the UK Trader Support Service on YouTube, as the speakers discuss how to prepare for the changes under the Protocol on Ireland/Northern Ireland, and what the Trader Support Service does (including what it doesn’t do), and how it will work as a customs intermediary service for NI trade.

 

10 things to do: Prepare for Brexit

Trading conditions between the UK and EU will change from 1 January 2021. Whether you are trading in goods, and/or services, here is a useful infographic outlining the top 10 things you can do now to prepare for the changes ahead regardless of the outcome of the current talks.  

10 things to do: Goods

10 things to do: Services

 

 

UK government issues readiness letters to businesses across various sectors

UK Secretary of State for Business, Energy, and Industrial Strategy, Alok Sharma has issued letters to businesses in a number of sectors such as professional services, agri-food, tourism, hospitality, and manufacturing, among others.

The letters provide tailored advice on what key actions businesses must take after the transition period ends on 31 December 2020. The letters contain QR codes and URLs which direct readers to GOV.UK, where they can view the online transition checker, sector specific webinars and access further guidance.

We have listed some of the most relevant letters below:

 

Brexit Omnibus Bill 2020: Cabinet agrees to amend VAT Retail Export Scheme to support Irish retailers

The Irish cabinet has agreed to a Committee Stage amendment to the Brexit Omnibus Bill 2020, to deal with the VAT Retail Export Scheme to support retailers.

The VAT Retail Export Scheme allows tourists from outside the EU to claim a VAT refund on goods purchased in the EU. When the UK becomes a third country from 1 January 2021, UK travellers will be able to avail of this scheme, as they will be resident outside the EU, unless Ireland implements legislative changes.

In order to address concerns that there might be scope for abuse of this scheme due to the UK’s proximity to Ireland and to protect Irish retailers, the Committee Stage amendment seeks to reduce the minimum required value of a qualifying good under the VAT  Retail Export Scheme from €175 (contained within original Bill) to €75.  The Scheme does not apply between Ireland and Northern Ireland due to the fact that EU VAT rules on goods apply to Northern Ireland under the Protocol on Ireland/Northern Ireland.

 

For all Brexit updates, visit our Brexit webpage.