The European Council and the United Kingdom have agreed to defer the latter’s departure date from the European Union until January 31, 2020. The agreement has been labeled a “flextension,” because it leaves open the possibility of an earlier departure date, should the two sides successfully negotiate a Withdrawal Agreement. Prime Minister Boris Johnson, in his letter of Oct. 28th accepting the extension, made it clear that the extension was a requirement of the recently-passed Benn Act, and not his own preference.
The Prime Minister’s proposed Withdrawal Agreement remains on hold, pending the results of an early election in December. If the Withdrawal Agreement were to pass Parliament, it is expected that the UK will enter a transition period lasting until the end of December 2020. During this transition period the entirety of the UK would remain within the EU VAT Territory. After the transition period concludes, the current version of the Agreement would apply special VAT rules to Northern Ireland.