Overseas Chambers of Peter Harris

Maison de la Boucterie
Rue de la Boucterie
Saint Saviour
Jersey, JE2 7ZW

The United Kingdom Internal Market Bill and its potential effects on Crown Dependency businesses

November 27th 2020

The  United Kingdom Internal Market Bill (IMB) currently before Parliament is quite a deceptively named piece of legislation as it in fact admits the fact of four internal markets within the United Kingdom.

 

This is in part a consequence of the Northern Ireland Protocol in the Withdrawal Agreement, certainly, but it is also a necessary regulatory mechanism now that the United Kingdom is no longer within the European Union and more specifically the EU Internal Market.

 

The Bill recognises the fact that there are now four devolved nations and four potentially differing jurisdictions within the United Kingdom , namely Scotland, Wales, England and Northern Ireland. Whilst presently more or less integrated it is clear that regional differences will give rise to differing standards of regulation in each one. The Bill is intended to provide a regulatory framework for that economic future .

 

That therefore excludes from the  UK Internal Market the Crown Dependencies of the Isle of Man, which is a separate economy with a VAT system integrated into that of the United Kingdom, and those of the Bailiwicks of Jersey and of Guernsey, who have only recently introduced systems of a VAT like tax the GST. There are historicy excise and customs boundaries between these that were effectively rendered irrelevant durin he application of Protocol III. They will no longer be irrelevant after 11.00 pm 31st December, 2020 and trade between the British Islands wil be affecred

However all of those systems have an area implicit in them, currently there are no customs or excise boundaries between them, but that will change in relation to Northern Ireland - UK(NI), and it is clear that whilst the regulations as to transactions in goods with the United Kingdom are likely to remain similar in the immediate, these risk changes as to trading with the four economies within the UK Internal Market as these start to evolve and potentially devolve.

 

It will be interesting to see what might happen to Berwick on Tweed, which is in a limbo between Scotland and England. Will there be a potential for an excise free zone in the railway station? I doubt it.

 

Services and rights of establishment and professional qualifications are also addressed in the IMB

 

Please see a short summary on the Resources page.