Researchers have analysed a number of scenarios, depending on whether the UK’s departure is viewed as a divorce (when all assets and liabilities are split), or as something more akin to cancelling a club membership, where agreed commitments are honoured but there is no share of the assets.

Their calculations suggest that there would be €724bn EU liability and commitments at end-2018, to which the UK might be asked to contribute. These include existing but deferred budgetary commitments; significant legal commitments; EU borrowing to finance financial assistance programmes; and pension/sickness insurance liabilities related to EU employees, plus other contingent liabilities.

The researchers point out that for both the club membership cancellation and divorce approaches, a key question is how to define the period for which the UK has committed to make contributions. This issue is particularly complicated given the special nature of EU budgeting, which includes planned payments and planned commitments, with the bulk of planned commitments made in a particular year deferred for payment in later years.

In 2013, the UK agreed to the EU’s seven year budget plan, the 2014-20 Multiannual Financial Framework (MFF).

The report says the largest Brexit bill in its analysis is the result of including all planned budgetary commitments related to the 2014-20 MFF up to the end of 2020: these include €580bn planned payments in 2019-2025.

Including only the legal and budgetary commitments made before the Brexit date, which include €398bn of planned payments in 2019-2023, reduces the bill somewhat. If the calculations are based only on planned payments up to 2020, or only include actual payments up to the Brexit date, then it is cut further.

However, the researchers warn that any financial analysis will be strongly affected by political and policy decisions; for example, the degree of the UK’s access to the EU single market after Brexit, and other elements of the new EU-UK relationship, might also be factors to consider.

There is also the so-called ‘UK rebate’. Since 1985, the UK has been entitled to a financial rebate of about 66% of its net contribution to the EU budget in the previous year. Taking this into account, then the UK’s share of commitments is 12% using 2009-15 data. But if the rebate is not considered as a factor that lowers the UK’s gross contributions to the EU budget, then the UK’s share turns out to be 15.7%. In addition, there is the question of whether any rebates will be due to the UK post-Brexit.

The researchers also point out that of the total €580bn post-Brexit EU spending plans, €28.9bn is planned to be spent in the UK. This could be considered as factor offsetting UK payments in the Brexit bill.

The report notes that ‘the size of the Brexit bill will depend on fundamental political compromises and choices’, which could product very different Brexit bills. It includes breakdowns of four of the most likely scenarios.

Divorce settlement or leaving the club: a breakdown of the Brexit bill is here.