The terms of financial equalization are the same as in the withdrawal agreement negotiated by Theresa May`s government and in the most recent version. The withdrawal agreement between the European Union and the United Kingdom sets out the conditions for the UK`s orderly exit from the EU, in accordance with Article 50 of the Treaty on european Union. The Financial Scheme for Brexit (“divorce bill”) is a sum of money that goes to the European Union (EU) of the United Kingdom when it left the EU (a process commonly known as Brexit) to pay the UK`s share in the financing of all commitments made during its term as an EU member.  In the withdrawal agreement, it is officially referred to as “financial equalization.”  The United Kingdom would continue to benefit from all programmes as before the withdrawal, provided that it complied with existing EU legislation.  On 29 April 2017, EU-27 heads of state or government unanimously adopted the negotiating guidelines drawn up by Donald Tusk.  The guidelines consider that Article 50 authorises a two-stage negotiation, during which the UK must first accept a financial commitment and lifetime benefits for EU citizens in the UK before the EU-27 negotiates future relations.  A short Brexit briefing: the budget deal – a summary that informs about what the comparison is and how much it could cost. On 23 March 2018, EU and UK negotiators reached an agreement on the draft withdrawal agreement allowing the European Council (Article 50) to adopt guidelines for the framework for future eu-UK relations. The UK Office for Budget Responsibility estimated financial compensation at $32.9 billion when the UK left the EU on 31 January 2020.  Since 31 January, the United Kingdom has been in a transitional period and continues to contribute to the EU as if it were a member until the end of the transitional period, which will reduce the amount of financial equalization.  The government has not explained why it wants to end the continuous service system after March 31, 2021. About two-thirds of the UK`s net payments could still be due as of 31 March 2021. When Theresa May`s government explained how it would legislate on the financial regulation (in its White Paper), it said it would use a permanent service and no deadline was set.
Since the amount of payments will vary, May`s government has explained that the payment of financial compensation would require flexibility that should be better provided by a permanent provision of services. Until March 31, 2021, financial performance payments are made directly from the government`s performance account (consolidated fund) without the need for parliament`s annual approval. This method of direct payment is called permanent service. In this way, the United Kingdom, as a Member State, is currently making payments to the EU in accordance with the European Communities Act 1972. In 2017, the UK held 16% of the European Investment Bank (EIB) worth GBP 8.8 billion, based on data provided by Lawyers for Britain.  Financial compensation is intended to maintain the UK`s responsibility under the EIB guarantee for the financing that the United Kingdom has provided as a Member State and to reduce its level in line with the amortization of the outstanding EIB portfolio on the date of the UK withdrawal, at which the UK`s paid-off capital will be repaid to the United Kingdom.  In March 2018, the OBR estimated net asset compensation at 3.5 billion euros.  This awareness sets out what has been agreed in the financial regulation and explains how the UK government intends to implement it through the EU law (withdrawal agreement).