The House of Commons voted against the Brexit deal. How will the Brexit proceed now and what are the consequences for companies and employees? Read our summary.

How to proceed?

The opposition leader, Jeremy Corbyn, has filed a no-confidence motion against Prime Minister May today, which is being voted on today, 16 January. A majority of the current Parliament is expected to vote in favour of the current government to remain in office. Meanwhile the government can negotiate a new temporary Brexit-deal and present it to the House of Commons until Monday 21 January. Since both the European Union and Prime Minister May have indicated that major changes in the Brexit deal are out of the question, it is highly unlikely that a majority of the House of Commons will vote for a Brexit deal before 21 January.

If the European Union and the United Kingdom will not reach an agreement, the UK can request the EU to postpone the Brexit date of 29 March. The EU has to agree on this unanimously. An alternative is a new referendum, in which the British people can vote on the Brexit again. In case the Brexit will not be cancelled, there will be no agreement and no extension will be granted, the no deal-Brexit will happen on 29 March 2019.

Consequences

A no deal-Brexit may lead to extra costs and administrative procedures with import and export of goods, compulsory permits and certificates. There may be consequences for VAT and social security purposes as well.

Dutch Cabinet presents several solutions for no deal-Brexit

The Dutch cabinet has presented ‘decent solutions’ for a no deal-Brexit scenario. One of these solutions is that transitional law will be implemented for the 45.000 Britons who are currently living, working or studying in the Netherlands and who will no longer be staying in the Netherlands lawfully based on EU citizenship after the Brexit. Those Britons are allowed to stay in the Netherlands after the Brexit for fifteen months and the conditions remain unchanged. Without further arrangements between the UK and the EU, they will have to request a permanent residence permit to live, work or study in the Netherlands after this period. Britons who are already residing in the Netherlands lawfully for at least five years are entitled to a permanent residence permit.

Futhermore, driver licences from the UK can be exchanged for Dutch driver licences without a theoretical and practical exam in advance. Every person with a UK driver licence is allowed to drive in the Netherlands for a maximum of 185 days after a no deal-Brexit. ‘Decent solutions’ regarding social security of Britons in the Netherlands or Dutchmen in the UK are yet to be presented.

Written by:

Belastingadviseur Thomas Drost

Thomas Drost LL.M.

Tax advisor and global mobility specialist