EU Makes Contingency Plans for “No Deal” Brexit
As I write, we’re still largely none the wiser about the UK’s future relationship with the EU. But if there’s one conclusion that can be drawn from all this, it’s that the Mother of Parliaments might be ready for a makeover. The British constitution, largely unwritten, and famous for its flexibility and adaptability, has coped with many past national emergencies. But it’s no exaggeration to say that the constitution’s elasticity is being stretched to breaking point by Brexit. What’s more, it’s difficult to know who’s in charge now – the Government? MPs? Speaker Bercow? The Downing Street cat? Anyone? No-one?
Understandably, now is not really the right time for Britain to have a debate on constitutional reform, given that the nation is already in the throes of a collective nervous breakdown. Such a thing would also be a turmoil too far for taxpayers, many of whom, I hear, are beyond caring what sort of Brexit they get, as long as they know what the tax rules will be on cross-Channel business operations from March 29. Or is it April 12? Err, May 22? 2021?
Businesses were therefore likely to have taken cold comfort from the European Commission’s announcement that its preparations for a “no-deal” Brexit are complete. Employing almost Bercow-esque language, the Commission said that the EU’s contingency measures “will not – and cannot – mitigate the overall impact of a ‘no-deal’ scenario.” Nor, we were told, do these preparations “in any way compensate for the lack of preparedness or replicate the full benefits of EU membership or the favorable terms of any transition period.” Well, that’s reassuring then.
Indeed, businesses, it appears, are on their own. For, according to the announcement, it is up to citizens and businesses to continue “informing themselves” about the consequences of a possible no-deal Brexit. That could, I posit, be quite difficult, given that right now nobody knows for sure what these consequences are going to be. Seems the Commission has misunderstood the definition of “preparedness,” and of “helpfulness.”
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look