On November 3, 2016 the UK High Court handed down a
ruling1 preventing the UK government from triggering
Article 50 TFEU – the EU legislation triggering the start of
the administrative procedure for the UK's exit from the EU
– without parliamentary approval.
Following the referendum on June 23, 2016, where the UK voted to
leave the EU, Prime Minister Theresa May and the UK government
announced that they would use the Crown's prerogative powers to
trigger Article 50 as early as March 2017. The use of prerogative
powers would allow the government to trigger Article 50 without the
approval of the UK parliament. Claimants argued that the
government's position had no basis in law, in particular under
the UK's European Communities Act 1972 and that the
government's position was contrary to fundamental
constitutional principles of sovereignty of parliament.
Ruling in favor of the claimants, the High Court found that the
government does not have the power under the Crown's
prerogative to give notice pursuant to Article 50 for the UK to
withdraw from the EU, meaning that any trigger of Article 50
requires parliament to vote on the matter. As a result, pending
appeal, any decision to trigger Article 50 will require approval by
MPs in the House of Commons, as well as approval by the House of
Following the ruling, the government has confirmed that it will
seek to appeal the judgment to the UK Supreme Court. A hearing
before the Supreme Court could take place as early as December.
The High Court ruling has important implications for the
"Brexit" process. In particular, it gives the parliament
an important role to play in the process. With a majority of MPs
having voted against Brexit in the referendum, the outcome of a
vote to trigger Article 50 cannot be certain. Having said that, MPs
will not want to be seen as going against the will of the people
and outright opposition to the triggering of Article 50 seems
unlikely. Instead, the practical effect is likely to be that the
government will have to engage with and at least to some extent
agree with parliament on the priorities of the UK's Brexit
negotiation with the EU. This, in turn, may cause delay, increase
uncertainty (as to timing and outcome) and will inevitably
intensify the public debate about the UK's role outside the EU
and the meaning of "Brexit".
The government has been working to incorporate the changes required as a result of the OECD's work on BEPS Action 5: Harmful Tax Practices, which requires implementation of a Nexus approach to the Patent Box regime.
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