Brexit and Bravado – some taxing implications
We have implemented Article 50 and the countdown to leaving the European Union has begun. We must look forward and ride the wave of the current positive market trading conditions, and build relationships with those who want to continue to trade with us.
There are concerns about changes to freedom of movement impacting business growth. Tax incentives that encourage apprenticeships, innovation and investment into smaller businesses will continue to make the UK an attractive place for businesses of all sizes. Leaving the EU might actually enable us to improve these incentives as we will no longer be accused of providing unfair state aid to attract investment into the UK. The reaction of many larger international businesses that have recently announced further investment and commitment to the UK also helps to counter some of the negative press that has been circulating. Talk of a “barista visa” to enable lower paid workers to continue to support our hospitality industry is welcome.
UK tax laws have evolved to ensure that those who live and work here do not have an unfair advantage if they have origins outside the UK. Non UK domiciled individuals who own UK property cannot shy away from paying taxes on those assets, even if held through complex structures offshore. Despite headlines to the contrary, this has not resulted in an exodus of offshore investment in the UK. Brexit is consequently unlikely to make a difference to the attraction of the UK as a safe haven for investment, and the Government has indicated that those who will bring a positive contribution to the UK will not be prevented from coming here.
Whether we are in the EU or not, we need to fundamentally change our approach to raising taxes, looking after our elderly and mapping out a future for our younger generations. How we tackle these issues will dictate the future of the UK and we, rather than Brussels, are probably best placed to decide our approach.
The current UK tax system needs a complete rewrite and Brexit could be the catalyst. We will not have to worry about EU legislation and precedents and can dream of a flat rate of Income Tax, the merger of Income Tax and National Insurance contributions, clear guidelines as to what constitutes acceptable tax planning, a ban on retrospective legislation, wealth taxes instead of death taxes etc. Let’s issue a tax wish list to make our regime simple, transparent, effective and the envy of the world.