What is Hard Brexit?

Brexit can take many forms. Different forms should be envisaged as a spectrum with ‘Soft‘ and ‘Hard’ being two possible points on it. When people talk about Hard Brexit they envisage an agreement where the UK would leave not only the EU but also the EU’s Single Market (of which non-EU countries are also members) and the EU Customs Union (of which non-EU countries are also members). The UK would instead aim to secure a free trade deal with the EU, ideally covering both goods and services.

In a Hard Brexit situation, the UK would not have to sign up to free movement of EU nationals, or be subject to the European Court of Justice. It would probably not have to contribute to the EU budget. It would also be able to sign free trade deals with other countries. However, the UK is unlikely to be able to sign a free trade deal with the EU or other countries before it leaves the EU in 2019 – negotiating trade deals usually takes many years.

Unless a transitional deal with the EU is reached, it is quite likely that for a period of a few years the UK would have to trade with the EU and other countries under World Trade Organisation rules. This is expected to have a negative impact on the UK economy.

But what about Soft Brexit? See our fact page here.

For varying analysis on Hard Brexit, try Guy Edwards’ negative piece compared to Jamie Whyte’s angle on how it could be good for tax.

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