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BREXIT. Yay or nay?

Brexit-Robie

BREXIT. Yay or nay?

 

The billion-pound question is whether Brexit will happen. Is it a yay or a nay?

Through this article, we will show our views on whether Brexit will happen and explore some of the possible scenarios after Brexit.

If a deal regarding Brexit is reached between the European Union (EU) and the United Kingdom (UK), the effect of the deal on the EU and, more importantly, the UK will depend on the terms of the deal that was agreed on.

BREXIT – again?

Something which is popular within the topic of Brexit is a second referendum.

Legally speaking, a second referendum is possible.  However, in political terms, the current government is willing to call a second referendum is very unlikely.

Calling a second referendum for Brexit would be a political suicide not only for Mrs. May but also for the Conservative party as this will show them backing up from their previous project of leaving the EU.

However, can politicians ignore the national urge from the population for a second Brexit referendum as illustrated by the “people’s vote march” of 700,000 rally which happened on 20th October 2018 in London?

With the Brexit deal facing a lot of uncertainties, it is almost impossible to guess what will happen once the clock turns to 11pm GMT on 29th March 2019.

Possible scenarios….

  1. Closed door scenario for immigration -> Immigration or no immigration?

One of the possible scenarios after Brexit is a closed-door situation for immigration. But what does this mean for EU nationals?

If a closed-door scenario for immigration happens after Brexit, EU nationals will be treated the same as third-country nationals.

Therefore, EU nationals will face stricter immigration rules to move, live, and work in the United Kingdom with their family members.

The UK Immigration Rules’ approach towards immigration is not only stricter but also unpredictable. Unlike the EU law, the UK immigration law is subject to the UK government’s amendment brought on by politics and stance towards certain diplomatic topics. For example, the relationship between the UK and Russia can influence how a Russian national is treated within the purposes of immigration.

The table below will provide a brief comparison between the differences of the current immigration law for EU nationals and the closed-door scenario.

Current law (EU law)

 

Under the current EU law…

Closed-door scenario

 

In the worst-case scenario…

Work EU nationals can work in the UK without the need for a work permit. If EU nationals are treated as third-country nationals, they might need a work permit in order to work or undertake business engagements in the UK.
Study EU nationals can study in the UK without the need for a student visa. Moreover, EU nationals are able to receive undergraduate tuition fee loans and Master’s loans if they have resided in the EU for at least 3 years prior to study. EU nationals who have resided in the UK for over 5 years are also able to apply for undergraduate maintenance support. If EU nationals are treated as third-country nationals, they might need a study visa in order to study in the UK. More importantly, they might also no longer be eligible to receive undergraduate tuition fee loans, Master’s loans, and undergraduate maintenance support, which will consequently mean that studying in the UK for EU nationals might be more expensive and even unaffordable to some.
Family members Family members of EU nationals can come and remain in the UK under a more flexible EU law if they meet the relevant requirements. If EU nationals are treated as third-country nationals, their family members will not enjoy a flexible EU law anymore and will have to apply under the stricter UK immigration law. For example, in most cases, it involves financial requirement, English language test etc…

 

Balance of qualification – Are you qualified or not?

Currently, within the EU, there is a system in place that facilitates the recognition of professional qualifications.

Depending on the profession, professionals within the UK have their qualification automatically recognised in another EU state. The reason for this is that there are rules on common minimum requirements for training to which all EU states must adhere. Therefore, a diploma belonging to such professionals must be automatically recognised in another EEA state. (These professionals are doctors, dentists, midwives, pharmacists, architects, etc.)

On the other hand, for other regulated professions, a “general system” applies for the recognition of their professional qualifications. The recognition of their professional qualifications depends on whether the professional has had professional training of about the same level and duration as the equivalent training in another EU state.

If the balance of qualification has not been negotiated or discussed after Brexit, then, this might potentially jeopardise UK professionals who are currently or are planning to practice in another EU state. This may well mean that their professional qualifications will not be automatically recognised. Thus, making the recognition of their professional qualifications impossible or at the least, arduous.

Reciprocity – Not just EU nationals but also UK nationals!

A no deal between the EU and the UK will not only affect EU nationals in the UK but will also affect UK nationals in the EU. Reciprocity – if the UK imposes restrictions on EU nationals, so will the EU on UK nationals in the EU.

  1. Close door scenario for trades -> a bad effect on the UK economy? 

A closed-door scenario for immigration is likely to also equate to a closed-door scenario for trades.

Currently, cross border transactions for services and goods within the EU are mainly tax free under certain circumstances. However, if a closed-door scenario for trades between the UK and the EU happens, the UK (businesses in the UK) might have to pay taxes to be able to import and/or export services and goods within the EU.

The consequence of this is that businesses in the UK might have to pay taxes for crossing each border within the EU.

Such scenario could have a devastating effect on businesses in the UK. Having to pay taxes or at least more taxes than now will certainly increase the expenses of businesses in the UK and therefore decrease their profit.

In some cases, especially for small businesses or sole traders, having to pay taxes or at least more taxes will not be cost-effective for their businesses which can render them unprofitable. This will be due to the higher threshold that they would have to meet in order to breakeven with the cost of running their businesses against the profit derived from running of the business.

This in turn will also harm the UK’s economy, lower profits will directly affect the amount of taxable income or profits from businesses as a result of facing obstacles (control) and taxation to import and/or export goods and services in the EU.

However, on another hand, the close door scenario can be beneficial for third-country nationals willing to invest or open they business in the UK as the competition from EU will probably decrease.

Lastly, if you are still unsure about your right to reside in the UK as an EU national, please refer to our article ‘BREXIT: Right to reside for EU nationals and their family members’.

Barar & Associates will be more than happy to provide you with further information about Brexit. Please do not hesitate to contact our team if you require any UK immigration assistance or information.