Since the Brexit vote in June 2016 there have been worries about how the process will impact on businesses and taxation. Northern Ireland has been a heavy focus of due to its proximity to the Republic of Ireland. Debate has been taking place over border controls, current EU funding, and rules of taxation. However, there are a few things you should know with less than a year to go.
At Coleman and Co our team help businesses manage their taxation. We also provide advice on upcoming tax changes and how to prepare for them.
Brexit and the Impact on Northern Ireland
The Brexit vote has had a massive impact on Northern Ireland. With over 56% of the country voting to remain, there have been fierce debates on how things will work. Concerns have been aired over a hard border and the impact this could have on the 1998 Good Friday Agreement. A hard border could impact on businesses, both large and small. The collapse of the Stormont assembly in January 2017 has similarly brought politics in Northern Ireland to a standstill.
There are several ways, both positive and negative, that Brexit can impact on businesses in Northern Ireland. Knowing what these are and how they could affect your business can be beneficial.
There are many worries that leaving the European Union will impact badly on taxation. How taxation will be determined and applied is yet to be known. With a year to go, many are becoming concerned over the potential impact on their business.
Questions remain over how corporation and general tax is to be implemented and where levels will be set. There are also discussions about how tech giants like Facebook, Google, and Apple will be taxed in a post-EU economy.
One of the largest taxation worries comes from how VAT (Value Added Tax) will be handled. The movement of goods or services is crucial to most businesses. There are fears that taxation will rise and tariffs will be placed on anything entering the UK.
The Legal Process of Taxation
It is thought that most tax systems will be introduced using secondary legislation, especially VAT. Head of Deloitte’s tax policy group Daniel Lyon’s believes that this could cause problems. There is a risk of the implementation of legislation that has not been consulted on.
A further problem arises from our judicial system. The current judicial system in the UK is bound by the laws outlined by the CJEU (Court of Justice of the European Union). As we leave the EU, this will create problems for tax cases currently processing and waiting to be processed.
Change in the Air
Despite all the worries, there has been a more recent positive change in the air. Earlier this week the pound rose above $1.43 for the first time since January 25 and the second time since the June 2016 Brexit vote. This rise signals towards a more stable currency and better business. A 21-month transition period has recently been introduced to the delight of many businesses. The period which is to run from March 2019 will give businesses the time they need to adjust to changes.
Two recent surveys by the Institute of Directors (IoD) and Deloitte survey have shown a shift in company attitude. 700 company directors interviewed by the IoD in March showed more optimism about the exit process. A further survey of 106 Chief Financial Officers at Deloitte discovered that there has been a boost to business confidence as the Brexit transition develops.
Others argue that the change will lead to greater opportunities for all businesses. For example, British companies will no longer need to fill in EC sales lists or intrastat declarations. There may also be opportunities for VAT to be reclaimed from non-EU companies.
Every business should keep on top of Brexit as it develops. Knowing what changes are upcoming can help you to stay in front of taxation requirements. If you require any help or advice, our friendly team are there to provide it. You can call Coleman and Co today on 028 9266 3599 or fill in our contact form to make an enquiry.