How is BREXIT going to change the tax we pay now and in the future?
I think the answer is obvious, we don’t know. And that uncertainty is scary!
It was stated over the weekend that the leave campaigners had no plan to invoke after they won the referendum, and I think that is right because it is the government that needs to give us the plan going forward. Despite their personal beliefs and whether individually they were “Leave” or “Remain”, surely the government as a collective body should have a plan ready to announce as soon as the result was in. Surely they had a plan A and a plan B, some sort of contingency plan other than the prime minister stepping down. It would have helped allay some of the confusion and fear we’ve seen since Friday morning.
Some of the information and tactics used in the run up to the referendum doesn’t fall far short of propaganda and in times of confusion we need someone to step forward and reassure all those that voted to remain. David Cameron quickly came forward and said he wasn’t the man to take us out of Europe and handed in his notice, whilst the Bank of England announced that actually they had considered life after Brexit and were ready for it. It isn’t until today, 4 days later that the Chancellor has come forward.
Is the apparent lack of an authoritative voice reassuring us that all is under control, and to just carry on for now a sign that there is chaos in Downing Street? Seems so.
There have been calls for an emergency budget, but if there isn’t a plan in place then how can there be a budget. The Remain campaign did make mention of an “Exit” budget which increased both income tax and inheritance tax rates, but how much of that was based on scare-mongering? I doubt we will ever know.
Big business is important to this country and I really doubt we will do anything to upset those big businesses. Yes they pay less tax here than they would elsewhere but think of the jobs they create and so I can’t see any change in corporation tax, but I just don’t know. Hence the uncertainty!
I had someone on Friday ask me about the future of VAT following our exit from Europe. Actually I think this is one of the easier questions to answer because I think VAT raises too much money for the government and so even if VAT was a casualty of us leaving Europe then it would simply be replaced with a sales tax. So if we accept that VAT, in whatever guise, will carry on then it comes down to any changes in the tax rate. Again, we don’t know.
So, in conclusion.
More and more articles and comment are starting to be released but none of the ones I have read are offering anymore than I am here which shows that no one really knows. (Surely someone must have considered the EXIT campaign winning, but I am repeating myself)
Remember we’re still in Europe for at least the next two years and so there is time for a plan and I’m sure future budgets will begin to reflect the transfer away from Europe. So short term it looks like we carry on as usual but middle to long term we’ll need to see the information coming out of Downing Street to see if we can start to build up a sensible forecast and think about how we might plan accordingly.
Which leads me to my last thought, planning. Whatever is decided, whatever changes might happen to our tax system there will be winners and there will be losers, but most importantly there will be opportunities. And the trick is to grasp those opportunities, so perhaps scary isn’t the right word, perhaps its exciting!
Swindells’ Inheritance Tax Seminar – 6th September
Please join us for our latest Inheritance Tax planning seminar Robin and Duncan will be in reflective mood, looking back at planning strategies that have over the last 10 years saved our clients millions in Inheritance Tax, and looking forward, strategies that we expect to be equally successful in the future.
How to plan for a successful small business exit
A survey by Securian has suggested that more than half of small business owners plan to leave their businesses within ten years, that but three-quarters of them have no plan in place to make a successful exit. This article will help you understand what an exit strategy is, why it’s important and how to begin to put one in place.
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