Over the last few months we have all been deluged with scaremongering from both the IN and OUT campaigns. Well now we know the result so what are the changes likely to be.
Until Article 50 is enacted we are still subject to EU Law and Regulation so on that front there is no immediate change. Any change will possibly be progressive and will start from the point that it is agreed we are totally out. Which may mean that the full impact of any changes won’t be felt until 2 years from the point that Article 50 is enacted or possibly longer. That means there is no immediate panic over changes.
In fact the first real issue is our very own Finance Act 2016 which is still proceeding through Parliament and was expected to be enacted in early October but that may now be pushed back further. This may especially be the case if George Osborne ceases to be Chancellor as the new Chancellor may want their own spin on things.
As regards the EU the main change that will affect UK businesses is VAT. At present any changes to VAT rates or regulations have to be done in accordance with the wishes of Brussels. Once we are completely severed from Europe that will no longer be the case and Westminster will be able to change VAT rates and how they apply to individual items as they want. This will mean that items such as the Tampon Tax issue should not arise. However it should be remembered that VAT is a big earner for Whitehall and changes are easy to implement so it may become more of an issue with even more complexity in the future.
Small businesses that currently trade in Europe either through distance selling or selling digital services will probably see the most changes. For distance selling they may well find that they have to register for VAT in one or more EU Countries. Whilst those selling digital services may find that VAT MOSS is more difficult.
As mentioned above these changes are not going to happen immediately so there will be opportunities to plan for changes and businesses can therefore make changes to minimise any negative impact that there may be.
On a positive note Brussels will no longer have a say over the internal taxation of the UK which means that tax changes such as the R&D tax credit and Patent Box should be easier to implement. In fact both of which are intended to increase innovation and investment in the UK have both been hampered by Brussels imposing restrictions on the extent that they can help business. With Brussels no longer having a say in the internal taxes of the UK we will hopefully see more incentives of this type which will benefit existing UK businesses and attract others.
So whilst there will be administrative challenges that businesses will have to deal with this will hopefully be outweighed by the fact that businesses will receive more incentives to invest and grow. Having a strategy to both grow your business and manage your taxes is vital to all businesses and Reynolds and Co are always there to guide you through the chaos that Governments throw at us. If you are concerned about how your business will cope then contact Nigel Reynolds on 07885 490484.