The tax impact of BREXIT Part 1

In this brief and very welcome Brexit news hiatus, I thought it was worth a quick check back on trying to understand the tax effects of Brexit.

In this first post I will quickly mention corporation tax, income tax and payroll taxes, leaving the main event, VAT, for Part 2.

Corporation tax

Brexit has placed downwards pressure on the UK rate of corporation tax because the government feels there is a need to counter the negative perceptions of being out of the EU in order to incentivise continued inward investment.

There is also the very real possibility of manufacturing activities migrating to EU countries, so UK companies may need to get up to speed with foreign corporation tax regimes.

Income Tax

No impact anticipated.

Payroll Taxes

Minimal impact, although various arrangements that are in place between EU countries will need to be reviewed.  May be an impact on EU resident employees working partly in the UK, particularly relating to social security contributions.

I hope this whistle stop tour through Brexit and taxes leaves you feeling better informed, but if you have more questions, please contact me.

Brian Jukes is Dafferns Corporate Tax Partner and is a specialist in UK and cross border taxes.