On 23rd June 2016, the United Kingdom voted to leave the European Union. What does this mean for small business in the UK?
Andy Tree, Ex Council Leader, Associate Director at Techventures.London and MD of Accountancy firm Top Branch Partners says:
"There are some very uncertain times ahead. The pound has fallen to its lowest level since 1985. Very bad news for any UK small business, and its owners. We can only hope at this stage that markets stabilise and the pounds rises. If you buy abroad from either EU or non-EU countries then in the short-term a reduce in sterling value will now affect your income, but sales would generate a higher income!
In the long-term, it remains to be seen as to whether the UK will be able to negotiate an equivalent trade deal, stay in the single market or avoid tariffs. Companies abroad will be able to sell more cheaply to the UK, putting own small firms at risk of being uncompetitive and able to weather the storm. Bearing in mind we are still in the EU for two years after the date we formally request to leave (not the date of referendum result.)
Not directly related to businesses themselves, but as a result of a weak pound, business owners may see the cost of luxuries such as holidays abroad rise. Effectively reducing the value of any wealth created and the property market may be volatile. It remains to be seen how house prices and other investments will be affected.
Small Business Development funds from the EU and schemes such as R&D tax credits will surely no longer exist for UK businesses, so we wait to find out whether any equivalent schemes will emerge from the apparent savings generated from not paying into the EU?
Immigration appears to have been a key concern in this referendum. I have clients who have come to the UK from EU countries. They have created business¬†and pay their taxes and employ UK citizens. They also pay my firm for our services too! These people are most welcome in the UK and fear we have sent the completely wrong message to them! As I have said, I hope barriers are not put up to those seeking to add value to our country and that the fear of immigration scaremongering has not won. Perhaps an opportunity created is to encourage the right non-EU persons to come here on more favorable terms?
As I have said, I hope barriers are not put up to those seeking to add value to our country and that the fear of immigration scaremongering has not won. Perhaps an opportunity created is to encourage the right non-EU persons to come here on more favorable terms?
To try and be balanced in my views, I am also interested by the prospect of having a¬†greater democracy which is where the EU seemed so remote and unaccountable to many people. But hope this hasn't come at¬†too greater cost¬†and wonder if we really will end up with more "control."
There is now a great risk to the future of a very un-United Kingdom, and the prospect for Scottish Independence is perhaps understandably more realistic than ever. This will no doubt affect investment into Scotland from both UK firms and the EU, where the future is so unknown.
England, Wales, and Northern Ireland may end up as an isolated stand-alone state, outside of a club where we had a special status and a long-term economic future.
The political landscape has changed and new Conservative Leadership is likely to move the party to the right of British Politics. However, an opportunity opens up for the Labour party to re-capture the centre ground (if they can be bold enough to make the changes needed within the party). Which could move the centre-ground of British politics to a more pro-business place,¬†which could be positive for small businesses
To conclude, I believe in the UK and the Government must now work hard in the coming months and years. I would now like nothing more than to see our great country succeed now that the choice had been made, and see small business (the backbone of our economy) thrive. I just feel it's a shame we didn't stick with the EU for longer, as there was always an option to come out in the future - but no realistic way of getting back in on the terms we had."
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