Brexit: Trade Agreement – UK & EU’s ‘New’ Relationship


published on 4 January 2021 | reading time approx. 3 minutes


On the 23rd June 2016, the UK voted to leave the EU. After 1,646 days of negotiations, discussions and much political posturing finally on the 24th December 2020, a Trade & Cooperation Agreement (“TCA”) was negotiated between the UK and the EU.



At 11pm on the 31st December Great Britain will leave the EU Customs Union and The Single Market.

The European Commission have made an agreement without the approval of the European Parliament, and therefore MEPs are understood to reconvene and ratify the deal early in 2021.


Parliament reconvened on 30th December to ratify the deal and this has now passed through parliament! 



Mobility – Freedom of Movement

  • From January 1, EU citizens can’t move to the UK unless they have a job offer, earn at least £20,480 (often more), speak good English and have certain skills.
  • In return, UK citizens must get permission to live or work in EU nations and will need a visa for most trips over 90 days.
  • UK visitors to the EU need a valid passport; visas are required for stays over 90 days in a 180 day period; there will be additional border checks.
  • EU nationals already living in the UK must register for “settled status” by June 30, 2021. To get settled status, you must have been living in the UK for at least five years continuously, without a break of more than six months.
  • If you have not been in the UK for this long, you can get “pre-settled status”. You will then have to make a second application when you reach the five-year mark to upgrade it to settled status.
  • If you’re a UK national in the EU, you may need to apply for residency status in that EU nation before June 2021. You may also need to buy health insurance or register for healthcare.


Income Tax

  • Brexit should have no impact on an individual’s personal tax liabilities. Liability to tax continues to be governed by double taxation treaties.
  • UK legislation originally determined the eligibility of non-UK residents to the tax-free Personal Allowance (PA) by whether or not they were EU nationals. This would have produced a situation where an EU citizen who is a non-UK tax resident, is an having the benefit of the PA while a UK citizen who is a non-UK tax resident did not. However, the legislation has now been amended to ensure UK citizens who are non-UK resident are eligible for the PA.


Social Security

  • The Agreement contains a number of social security coordination measures aimed at protecting the entitlements of EU citizens temporarily staying in, working in or moving to the UK and of UK citizens temporarily staying in, working in or moving to the EU after 1 January 2021.
  • A wide range of benefits are covered, including old-age and survivors’ pensions, healthcare (e.g. European Health Insurance Card) pre-retirement benefits, maternity/paternity benefits related to the birth of a child, or accidents at work.
  • The provisions in the Protocol on Social Security Coordination will ensure that individuals who move between the UK and the EU in the future will have their social security position in respect of certain important benefits protected.
  • Individuals will continue to have access to a range of social security benefits, including reciprocal healthcare cover and an uprated state pension.
  • This Protocol supports business and trade by ensuring that cross-border workers and their employers are only liable to pay social security contributions in one state at a time. Generally, this will be in the country where work is undertaken.
  • UK workers who are sent by their employer to work temporarily in an EU Member State which has agreed to apply the “detached worker” rules will remain liable to only pay social security contributions in the UK for the period of work in that EU Member State.
  • Similarly, an EU worker who is sent by their employer to work temporarily in the UK from a Member State which has agreed to apply the “detached worker” rules, will remain liable to only pay contributions in that EU Member State.

Rödl & Partner is closely following developments and will update you as more details emerge over the coming days, weeks and months.

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