Following the UK’s historic decision to leave the European Union, many are wondering how the Brexit vote will affect their business and their personal finances.
Despite a current climate of uncertainty, the UK economy nevertheless remains strong and the result of the referendum will not have an immediate impact on any tax and business legislation. HMRevenue customs have already issued a statement to ‘carry on as normal’ There are no changes to any taxes, tax credits, child benefits or other HMRC services as a result of the vote on the EU referendum. Everything is continuing as normal. No laws have changed. There is no need to contact HMRC as a result of the EU referendum.
However, significant changes are likely to come into effect in the future. A number of significant opportunities could also arise as a result of the referendum.
Taxation
The current Corporation Tax rate of 20% is already scheduled to reduce to 19% from April 2017, with a further reduction to 17% by April 2020. However, the Chancellor has pledged to cut this even further, to 15%.
Calls are also being made to reduce rates of income tax, to reinforce the UK’s attraction to businesses and enterprise. We wait with anticipation for the Autumn statement, or news of any emergency budget in the interim.
State Aid
The EU state aid rules restrict the way in many reliefs can offer assistance to growing businesses, such as EIS, research and development and patent box reliefs. Removing the restriction of EU legislation may allow enhancement of these reliefs for SMEs.
Infrastructure
The period of uncertainty means that some will adopt a more cautious approach, looking to reduce spending. However, many are suggesting an increased period of capital investment, taking advantage of any EU funding whilst still available, and also the low interest rates, which are projected to be cut even further over the summer.
Such an investment would not only have a positive impact on the businesses involved in the delivering sectors, but also many other businesses providing, directly or indirectly, support to such businesses and employees.
We would like to reassure you that we at Salisbury’s will be keeping on top of any changes, and working to minimise the potential impact, and indeed take advantage of any opportunities arising, for you and your business.
Having in place a proper tax and financial planning strategy is always important, but this is now even More the case. As your accountants, we are ideally placed to offer expert, proactive advice on your business and your personal finances, from dealing with tax and compliance issues, to support with financial forecasting and strategic planning.
Whatever the future holds, we will continue to assist with your business, tax and financial planning needs, both now and in the years to come.
Please contact us if you should require further assistance.
