Brexit: could the tax system propel ‘no deal’ Britain to a bright economic future?
With just two months to go until the UK is scheduled to formally exit the European Union, we find ourselves still wondering about how that withdrawal will take place.
Will there be a negotiated separation or a so-called ‘no deal Brexit’, with all of the uncertainty that implies? Will the break-away even take place at all?
A lack of clarity isn’t good for the country and certainly isn’t good for businesses of all sizes which are looking to plan for the future. The situation calls for bold thinking, the creation of a dynamic strategy not only to reassure home-grown enterprises and their overseas partners but equip them with the means to capitalise on the future.
Whilst much intellectual effort has been expended in producing a draft agreement with the EU, I would argue that more is still required – and quickly – before those proposals are either ratified or jettisoned.
After all, those individuals hoping to somehow advance a novel economic approach after Brexit might be unable to do so if an agreement with Brussels binding the UK to a “level playing field” is in place.
Having spent an increasing amount of time since the 2016 referendum helping companies prepare for commercial life after the withdrawal, ETC Tax has compiled a White Paper setting out our detailed vision of how Britain might make the best of the next, as yet unclear chapter in its history.
In short, we believe tax should be regarded as a key driver to growth.
Overturning the somewhat traditional, jaundiced view of taxation almost as a brake on progress, we are convinced that many of the mechanisms capable of propelling the economy forward already exist.
Even though the Government has acknowledged that tax may have a role to play, there’s been no suggestion it will be a critical component.
However, its potential has been recognised only last week at the World Economic Forum in Davos, being described by Ireland’s Finance Minister, Paschal Donohoe, as actually helping countries to be competitive.
That doesn’t mean the UK necessarily becoming a low tax haven at all. The draft withdrawal agreement would not only prevent that but is also likely to greatly restrict any real fiscal freedom for Britain.
The Treasury has at its disposal the tools to ensure that the UK can remain very much open for business despite a very significant change in relations with the trading bloc on its doorstep. Even so, the deliberation about whether it wants to proceed with a tax-led approach needs to begin immediately, given the prospect of being unable to after negotiating an exit from the EU.
The time to talk about tax as a potential enabler for post-Brexit prosperity has indeed arrived, regardless of whether such a strategy is actually required.
Download our BREXIT White Paper from the ETC website (https://www.etctax.co.uk/download/brexit-whitepaper/) and let us know your thoughts.
If you have any queries on Brexit related, or any other, tax matters then please do hesitate to get in touch.