Article 50(2)

29th March 2017

Brexit: New tariffs, what new tariffs?

Now that Prime Minister May has written to the EU, triggering Article 50(2) of the Treaty on European Union, Brexit moves one step closer and SME’s slowly begin to wonder, “how might this affect us”? For your average local family business, the main areas of concern will probably be:

  1. How further exchange rate movements might further increase their supply chain costs,
  2. How new tariffs might also increase supply chain costs and/or make their goods and services more expensive in overseas export markets and hence supress demand,
  3. How higher UK interest rates would increase costs of borrowings,
  4. Less generous (currently EU funded) tax reliefs, such as R&D Relief,
  5. The economic shock caused by change and uncertainty, and how this might dampen demand for their goods and services.

Dealing with the second of these points, which gets a lot of air time in relation to negotiating a new trade deal with the EU, we perhaps have less to worry about than we feared. According to the WTO survey in 2015, the average import tariff (excluding agriculture) from a non EU country selling into the EU was only 2.3%. We have already seen and dealt with much bigger cost rises over recent years through oil price variations and the effect of the EU referendum decision upon exchange rates.

Global trade liberalisation over recent years has, helpfully, already eroded away this potential barrier to trade.

Blog entry by: Ian Piper.



 
Other items in Blogs
 
Ian Piper
18th January 2019 CryptoCurrency Taxation: HMRC close loophole?

HMRC are not known for being ahead of the curve, so trying to find official guidance on how exchange gains from selling bitcoin, and other crypto currencies, is expected to be self-assessed and taxed, was always going to be ‘problematic’. At the time of first researching this, the latest HMRC guidance was published in 3…

Read More »

Peter Brown
13th January 2019 5 things you need to know about Making Tax Digital

  Making Tax Digital (MTD) is the hot topic this year. It’s one of the most fundamental changes to the UK tax system since the introduction of self-assessment. From April 2019, VAT registered businesses with a turnover of over £85,000 will be required to keep records using software approved by HMRC.  We have condensed the…

Read More »

Stephen Malkin
11th January 2019 Financing your self-build project

  Borrowing to build Self-builders require more money up front than conventional homebuyers. This is because they have to buy their building plots and fund their planning applications before they can apply for any loans. Self-build mortgages tend to be interest-only as fixed-rate loans have substantial exit fees for those who change loans when the…

Read More »

Stuart Kierman
9th January 2019 Running A Business From Home

  If you are looking to start up a business, it is likely to be home based, at least in the early days.  Figures suggest that over 60% of businesses start in this way and that there are 2.9m businesses in the UK operating from home. This blog looks at some of the common questions…

Read More »

Richard Alecock
21st December 2018 Making Tax Digital …… Only 100 days to go!

It’s time to decide how you will digitalise your records in order to meet HMRC requirements ahead of April 2019 HMRC wants the UK to be one of the most digitally advanced tax administrations in the world, improving efficiency, effectiveness and ease of compliance. Their plans signal the end of paper accounting for millions across…

Read More »

Ian Piper
19th December 2018 A Taxing Christmas?

Business owners, like the rest of us, will be all too aware that Christmas is a ‘challenging’ time. A short working month usually means less production, less sales and less payments from customers. Add to this cost of staff Christmas bonuses, various festive jollies and large tax bills just around the corner in January, and…

Read More »