On June 23rd 2016, UK voters caused one of the most publicised and controversial events not just in UK political history, but worldwide. As we all know by now, the pro-leave voters won the UK referendum, making the UK the only country as well as Greenland to leave the EU. It was complete pandemonium as the pound dropped to its lowest in 20 odd years. But where does this leave UK economy; and specifically how does this effect UK limited companies, and are entrepreneur’s now going to be deterred forming companies in the UK?
So for all that have already established a company here, it’s effectively business as usual. Now that Article 50 has been triggered and we’re beginning the process of leaving the EU, you may be wondering what is going to happen. But, your company registration will remain the same. Also, there will be no need to re-register as these companies are protected under long standing UK corporation legislation. Furthermore the same EU rules and regulations that currently affect UK companies will continue to be enforced in this time. Think of it in this context; hundreds of UK companies are already owned by people who do not live or work in the UK or EU.
It’s highly unlikely that we won’t have actually finalised leaving the EU until at some point during 2018, so until that time there won’t be any detrimental changes to the formation industry and processes. But when we do leave, unfortunately it’s very challenging to anticipate and plan what impact there will be.
A common question we come up against; is whether business owners will have to pay more tax once we have left the EU? Well again due to the period of uncertainty, it’s difficult to say but there will certainly be substantial VAT implications. As we will leave the EU VAT framework, this will leave the UK able to create and incorporation their own rates and rules; which could well be of great benefit to UK limited companies. This is of course still theoretical; so for the interim period the anticipation surrounding the UK economy will certainly be palpable.
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This post was written by Chris Beck