Tim Mallon, head of taxation services at Wynyard-based Evolution LLP, reflects on the UK’s Brexit vote a fortnight ago…
Did anyone think last month that we would be where we are now?
A vote to leave the EU, a Prime Minster who is seeing out his notice, an official opposition in crisis and the potential of another Scottish independence vote. A week certainly is a long time in politics!
It seems that the only certainty for the coming months is uncertainty. The Vote Leave campaign seem to have been caught rather unawares by their victory and no sooner had the announcement been made that Leave had won, Boris Johnson had got rid of his usual bumptious demeanour and appeared some hours later in front of the world’s press looking like he had lost a pound and found a penny.
Over the following weekend, it has emerged that there really isn’t a roadmap for this sort of thing.
Some say that we don’t need to press the Article 50 button until there have been informal discussions about the terms of our leaving.
The message from the EU seems to be, “for all of our sakes, just get on with it”!
There seems to be genuine confusion about whether the “divorce settlement” will still give us access to the EU Single Market, and whether we will have to give us some of the control that Vote Leave hoped to take back on immigration as part of the deal for the free movement on goods and services. There’s been talk of another referendum and an early General Election.
On the face of it our region made its views clear in the referendum with most local authority areas voting to leave, some by big margins. Some have said though that this was simply a protest vote against “the establishment” and the EU appeared as a target for disillusionment with bureaucracy in general.
So what now for North East businesses?
Although the Chancellor didn’t mention an emergency Budget in his statement following the referendum, it seems likely that there may be additional measures coming forward in order to support business and to guard against any risks which might arise from the referendum result.
Mark Carney provided some reassuring words in the immediate aftermath which helped to calm the Stock Market.
With so much uncertainty elsewhere, HM Treasury has an important role to play in maintaining calm and we would hope that any measures will be supportive and proportionate.
There is much speculation about the future of EU funding for growing businesses.
Although the next round of funding is all but secured, there must be some doubt about what if anything will follow and what this will mean in terms of the investment decisions for this round.
For those who trade internationally, it seems likely that currencies will fluctuate in the short term although we don’t expect there to be other significant changes in trade terms. It will be important for those businesses to monitor exposure.
Naturally, we are keeping a watchful eye over the effects of Brexit for our clients’ businesses.
Associate Member: Head of Taxation Services