Taxit – Brexit and Tax

Since the vote to leave the EU was announced on 24 June, there has been much uncertainty in terms of trying to work out what economic impact will be felt by business and the electorate in the medium to long term. Three weeks seems to be a very long time in politics. So what do we know so far?

 

We have seen significant volatility in the stock markets, and what appears at present to be a medium to long-term ‘correction’ in the sterling exchange rate, although it should be noted that the pound was described as being artificially inflated just before the vote was announced, making any correction appear larger. In addition the FTSE indexes and others are broadly back where they were before the vote, or in an even better position now. There has also been talk of house price reductions, although we should all beware of anyone claiming to be able to predict the future in such exceptional circumstances. Economic forecasts, election polling and a sense of the status quo have all been found wanting in recent weeks.

 

It is therefore welcome today that the new Chancellor, Philip Hammond has confirmed that there will be no ’emergency budget’ in the near future. Likely Brexit implications on a future budget would be most likely to headline with any adjustments to VAT and duty, as this was of course a vote to change the character of our borders. Of course the details of these, and other changes, would be guided by the progress of our exit negotiations. We will see how quickly this progress can be made once David Davis, announced last night as Secretary of State for Exiting the EC (or Brexitary?) has settled into this new job.

 

So apart from a future, meaningful, reduction in corporation tax which has been signposted (by the now ex-Chancellor G. Osborne) we are none the wiser about any detailed plans the Treasury have for the future and our tax system inside a new Britain. However for now it is business as usual, and freelancers, contractors and others in business would be wise to remember that the economy is still churning, and the same work still needs doing as did before we voted on 23 June.

 

So if you’re thinking of setting up on your own, contact us on 0800 252640 to find out how we can help.

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