Comments from Peter Taaffe, Managing Partner at BWMacfarlane
Two months on, still no-one really knows how this is going to pan out, other than the transition is going to be painful. How painful remains to be seen. So far, deep breath, shock over, it’s steady as she goes but a lot of uncertainty.
The Bank of England for example has emphasised that our banks are in a strong financial position and post Brexit challenges have been modelled.
We emphasise that the thoughts set out below are at this point are initial thoughts only. This is not intended to form the basis of any definitive action or change.
Clearly other areas that are more likely than not to see change and develop and include immigration, employment law, health & safety, pensions, property values and demand, Court procedures and litigation and interpretation of the law. Such matters are of course for other professional advisers.
Given personal tax is set by national governments, there are unlikely to be any major immediate changes and George Osborne’s emergency budget to raise up to £15bn in new taxes has been quickly abandoned.
Whilst there may be short-term pressures on national finances, Philip Hammond, Osbourne’s replacement, continues to position the UK as a jurisdiction that seeks to attract international investment and Boris Johnson (the big Brexit surprise!) is fully supportive of this. So far the Bank of England’s quantitative easing attempts have not been a rousing success.
EU funding is clearly going to be withdrawn or over time release reduced so fundraising for UK charities inevitably will come under increasing strain. Suggestions are being made that some charities may want to establish European affiliates to mitigate this but this would clearly be a very significant step to take at this time.
If Brexit causes a recession in the UK, charities dealing with disadvantaged people, poverty, ill health or other crises are likely to experience increased demand for their services.
Those with substantial investments may see unusually high levels of volatility in values and risk. Keeping in touch with your investment advisers will therefore be imperative.
Charities will want to carefully monitor any changes to legislation that the post-Brexit Government makes, to assess how this might impact on their beneficiaries. It’s unlikely that the new Chancellor would want to risk the UK’s business friendly image combined with a low corporation tax rate (20% to become 17% by 1st April 2020) particularly given the uncertainty over current & future investment by business.