Brexit ― personal tax and employment taxes implications

Produced by Tolley

The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Brexit ― personal tax and employment taxes implications
  • Income tax for internationally mobile employees
  • Double tax treaties
  • Social security for internationally mobile employees
  • Personal allowances
  • Maintenance payments
  • State pension
  • Protective claims for relief under EU law
  • Risk finance investment schemes

Brexit ― personal tax and employment taxes implications

The UK negotiated a Withdrawal Agreement and left theEU on 31 January 2020 (referred to as ‘exit day’) with an 11-month implementation period up to 31 December 2020.

During this implementation period, theUK was no longer a member of theEU but was subject to EU laws, remaining a member of thesingle market and customs union. On 24 December 2020, theEuropean Commission and UK Government announced an agreement in principle on thelegal terms of thefuture EU-UK relationship ― theEU-UK Trade and Cooperation Agreement (TCA).

The TCA was signed by UK and EU leaders and then approved by theUK Parliament on 30 December 2020. The TCA applied provisionally from 1 January 2021 and entered into full force on 1 May 2021, following ratification by theEuropean Parliament. The UK has enacted theEuropean Union (Future Relationship) Act 2020, which makes provision to implement theTCA in theUK.

While exit day was important in terms of being thedate theUK ceased to be an EU member state, themajority of key domestic tax changes associated with Brexit take effect from theend of theimplementation period (specifically, 11pm (GMT) on 31 December 2020, referred to as ‘[Implementation Period] IP completion day’), including thefull repeal of theEuropean Communities Act 1972, incorporation of retained EU law into theUK domestic legal regime, and thecommencement of associated Brexit legislation and statutory instruments.

This guidance note gives an overview of thepersonal and employment tax areas affected by Brexit and some of thepractical issues to consider. Much of thetechnical guidance issued before IP completion day remains relevant, though it is likely to be subject to further amendment and review.

As revised Brexit notices and guidance documents continue to be issued post-IP completion day, it is a good idea to bookmark therelevant guidance pages and check for updates, in particular:

  1. GOV.UK website ―

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