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Brexit - Need to know

Transition and Brexit – what you need to know

04 Aug 2017

European flags blowing in the wind

A brand new IoD report reveals what steps the government should take in a transitional period after leaving the EU and the implications for British business…

You could be forgiven for thinking that so far the UK’s plans to leave the EU could be summed up as ‘all talk and no action.’

However, it seems inevitable that we will enter into a transitional period after leaving the EU in March 2019. Senior government ministers have said this is necessary in order for us to have a smoother departure from Europe.

To help you make sense of what that could mean for you and your business, the IoD has produced a new report titled ‘Transitioning from Brexit – not just semantics.’

The author is Allie Renison, the IoD’s Head of Europe and Trade Policy. She represents the voice of IoD members on EU reform matters and helps to provide the link between business and Government on increasing international trade. 

Allie observes that the call for a transitional period ‘has arisen following increased scepticism about the Government's intention to conclude a final agreement with the EU about its future relationship before the two-year Article 50 window expires in March 2019.’

‘While the objective is laudable and also one shared by the EU, the business community has learned from experience that Brussels and hard deadlines do not always mix well.’

Transitioning Brexit is essential reading for both the business community and those negotiating our exit from the EU by offering pragmatic and practical recommendations towards managing the exit from Europe.

You can download and read Bridging the Brexit Gap: Options for transition here.

To give you a flavour of what to expect, here are five key questions the report sets out to answer…

1. Can we leave the EU and remain in the Single Market?

Despite what you may have read, seen or heard, we cannot leave the EU and still remain part of the Single Market. However, Transitioning Brexit explores a path that leads to re-entering the market and states that ‘the consensus amongst most European legal and policy experts is that the UK would first need to re-join European Free Trade Association and negotiate its way (back) into the EEA agreement as a new contracting party.’

2. What are the options for Transition?

The report sets out a range - but by no means exhaustive list - of options for interim arrangements in order to move the debate on transition from desirability to practicality.

3. What are benefits of joining the European Economic Area after March 2019?

There is likely to be more autonomous control over sovereignty than simply prolonging the application of the EU's acquis, otherwise known as EU law. This would allow for a more cooperative and consultative approach in transition rather than pure imposition by Brussels once the UK has left the EU.

4. Should we seek to extend the Article 50 Period?

The report considers up the pros and cons of what would unquestionably be a contentious proposal as well as the practicalities and the timings involved.

5. The UK, the EU and the VAT union

Transitioning Brexit also recommends that remaining part of the EU's VAT union for a transitional period should be a priority. This will allow the UK to continue benefitting from the New Computerised Transit System and Electronic Declaration System. Goods moving between the UK, EU and other contracting parties to the agreement will still be considered as being in "free circulation" throughout this territory.

Download the report

Navigating Brexit for business

To help you navigate your way through the complex Brexit minefield, we have created a hub where you can find the latest information, guidance and advice to support and inform you and ensure you are fully up to date.

Visit our Navigating Brexit hub

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