Government publishes Brexit Repeal Bill

Prime Minister Theresa May has published the Repeal Bill which will transpose current EU laws into UK law post-Brexit, as opposition parties threaten to vote against the Bill when it is debated in the House of Commons unless changes are made, reports Amy Austin

The 66-page repeal Bill, formally known as the European Union (withdrawal) Bill, will repeal the 1972 European Communities Act and incorporate EU law into UK law. This will allow Parliament to make any future changes to law.

Labour has declared it will vote against the Bill unless changes are made, demanding that the Bill includes full protection of rights for British workers among five other conditions.

There is currently around 20,000 EU legislative acts in force with around 5,000 applying in the UK.

The Repeal Bill will convert EU law into UK law so that government and parliament can then decide how to handle them as UK, not EU, measures. Therefore most Statutory Instruments (SIs) implementing EU directives will continue come Brexit.

EU directives that are implemented by statue will be part of UK law but the relevant Acts of Parliament may have to be changed if they are based on EU law.

The EUs audit reform was introduced in June 2016 under the EU Audit Regulation & Directive (ARD) which the UK implemented as an SI known as the Statutory Auditors and Third Country Auditors Regulations 2016

Under the new ARD regime, public interest entities have to put their audit out to tender at least every 10 years.

Another directive passed by the EU and implemented as an SI is the EU accounting directive which became part of the Companies Act 2006 and transposed as the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015

This account directive is reflected in UK GAAP under FRS 102, the main reporting standard for the UK.

The Companies Act Law in the UK requires that directors of companies incorporated in the UK ‘prepare accounts for the company for each of its financial years’ which give a ‘true and fair view’.  Such accounts are either:

  • Companies Act Accounts, prepared in accordance with the accounting and disclosure requirements of company law and with the Financial Reporting Standards (FRS) /UK GAAP published by the Financial Reporting Council (FRC); or
  • IAS Accounts, prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB), as adopted by the EU.

After Brexit, the UK government will have to decide whether to continue to use IFRS endorsed by the EU, unadulterated IFRS as per adopted in Canada and Australia, or create a regulatory body to oversee and endorse IFRS.

The EU VAT directive aligns VAT within the EU VAT area and specifies that VAT rates must be within a certain range. The original sixth VAT directive was updated on 26 November 2006 as the Council Directive 2006/12/EC.

The UK will not retain EU directives as they only apply to EU member states, so they will cease to have effect in the UK once the UK leaves the EU. The Bill is not preserving them as they have already been implemented in domestic law.

The Bill also sets out how retained EU law is to be read and interpreted on and after exit day. Decisions of the Court of Justice of the European Union (CJEU) made after exit day will not be binding on UK courts and tribunals, and domestic courts and tribunals will no longer be able to refer cases to the CJEU.

David Davis, Secretary of State for Exiting the European Union, said: ‘It is one of the most significant pieces of legislation that has ever passed through Parliament and is a major milestone in the process of our withdrawal from the European Union.

‘By working together, in the national interest, we can ensure we have a fully functioning legal system on the day we leave the European Union.

‘The eyes of the country are on us and I will work with anyone to achieve this goal and shape a new future for our country.’

European Union (Withdrawal) Bill is available here

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