By: Marc Wessels
A no-deal Brexit would have major implications for British companies operating in the European Union. It would affect things like migration, social security, labour law, tax agreements and pensions, to name just a few. Below, we list the most important consequences of a no-deal Brexit.
Consequences for migration
If the UK leaves the EU without a deal, UK nationals will no longer have the same legal status as EU citizens. They will instead be regarded as third-country nationals, which means that they will no longer be free to work in EU member states. If this happens, British companies who want their employees to work in the EU will need to request visas and work permits. Requirements can also be set for the level of education or income of third-country nationals who wish to migrate to an EU member state.
Consequences for social security
At present, British workers employed in other EU countries are protected under European social-security regulations (883/2004). This means that they only have to pay one premium for all their social security provisions, in their home country as well as in their country of employment. In case of a no-deal Brexit, these regulations will no longer apply to UK nationals. For many British expats, this means that they will have to pay a double premium for two separate insurance policies, as is the case for expats from other non-treaty countries.
Consequences for labour law
In the event of a no-deal Brexit, the free movement of workers and services will cease to apply to British citizens without an EU passport. For UK employers, this means that they will have to comply with the national standards set by EU countries for non-EU employers. The European agreements on seconded employees within the EU will lapse, and the UK will have to negotiate new agreements with each individual member state.
Fiscal consequences of a no-deal Brexit
The biggest consequences of a no-deal Brexit have to do with taxes. If the UK fails to reach an agreement with the EU before leaving the union, VAT and import duties, corporation taxes, income taxes and wage taxes are all set to change. Under a no-deal Brexit, the free movement of capital and workers will no longer apply to the UK, which, as a result, would need to design a completely new tax system. British employees working in the Netherlands would no longer be able to make use of the so-called qualifying foreign tax liability, making it impossible for them to deduct their mortgage interest on a home in the Netherlands.
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