The lingering laws? Does the Brexit Agreement provide the EU with authority to monitor the UK income tax system?

A primary goal of Brexit supporters was the end of EU supervision of UK laws and the re-establishment of full UK sovereignty over all aspects of its legislative and administrative capacity. National sovereignty may, however, be compromised by international treaties in which the UK agrees to constrain the exercise of its sovereignty to gain benefits from its treaty partners and the Trade and Cooperation Agreement governing the post-Brexit relationship between the UK and EU is no exception. In particular, the Agreement appeared to impose four constraints on UK sovereignty in respect of its income tax system. A closer examination of the restrictive articles, however, suggests that three of the measures may have negligible practical impact on UK law-making powers. In contrast, the fourth measure preventing the UK from adopting concessionary tax measures that would amount to ‘state aid’ in EU terminology appears to have a direct impact on UK tax sovereignty. Its impact may be blunted, however, from seemingly incomplete or ineffective enforcement remedies. The final result may be a treaty that appears to constrain UK tax sovereignty and provides the EU with continuing authority to monitor UK tax law and administration, but which has little scope for practical impact.