UK Economy After Brexit - Business Research Methods Presentation

This presentation discusses the UK economy after Brexit, including the reasons behind the UK's vote to leave the EU, the legal and tax consequences, and the potential impact on the UK's financial services and taxes. It also explores the UK's relationship with the EU post-Brexit and the different models that could be implemented.

Business research
methods
presentation
UK economy after Brexit

Introduction
 Reason behind the UK voted for Brexit
 The Process of Brexit
 UK – EU relationship is hard or soft after
Brexit?
 Legal consequences
 Tax consequences
 Conclusion
 References

Reason behind the UK voted
for Brexit
 Is the UK remain a part of the EU?
 In 23 June 2016, it was announced
 Result:
 Remain: 48.1%
 Leave: 51.9%
 A huge revolution
 Understanding the politics of why UK voted to
leave helps to predict what are the impact on
economy in order to legal and tax
consequences
Leave
Remain

The Process - 2016
 Referendum result. Cameron resigned as
Prime Minister Cameron resigned on 24 June
(Dhingra, Ottaviano, Sampson, and Van
Reenen, 2016).
 Theresa May became Prime Minister: on 13 July
 New ministries for Brexit and for International
trade set up
 Legal case against Government’s attempt to
trigger Article 50 without Parliament’s approval
in November (Van Reenen, 2016).

Withdrawal Agreement is not
easy to UK
 UK is having a long Term EU-UK Agreement
 UK is required temporary Interim
Agreement with EU
 UK should negotiate with World Trade
Organisation
 UK to negotiate Free Trade Agreements with
 Countries with existing FTAs with EU(63)
 Other countries (USA, China, Australia?)

UK – EU relationship post-
Brexit
 The UK imports different things from EU,
which is having cost more than €341 Billion
 The UK exports different things to EU, which
is having cost more than €260 Billion
 UK is exporting more than 50 percent to the
EU.
 Without agreement everyone suffers in legal
and tax consequences

UK – EU relationship after
Brexit is Soft or Hard?
 “Canadian Model”:
Free Trade Agreement = MAYBE
 Complex and lengthy negotiations: 10 years?
 “Norwegian Model”: EEA + EFTA = NO
 The EU rules will implement
 Free movement of people
 EU budget is use to pay
 “Swiss Model”: bilateral agreements + EFTA = NO
 Free movement of people
 EU budget is use for pay

Legal Consequences –
Financial Services
 It will impact on the economy of the UK by 11 percent
 The UK is having authority to do business in the
territory of the EU states (Hunt, and Wheeler, 2017).
 It is a hard Brexit and this will end third country status
 Theses are the effects after Brexit:
 Regulatory burden
 Burden or Regulators
 Capital burden
 Many firms will have to move some business to EU
 The UK’s Financial Service legislation will change in
short term (Sampson, 2017).

Tax Consequences after Brexit
on the UK’s taxes
 Corporation Tax on businesses is 20 percent
but now, it falling to 19% in April 2017 and
it will be 17% in April 2020 by the UK.
 The UK’s Value Added Tax on supply of
goods and services is 20 percent.
 Income Tax on individual’s income is likely:
 Not paid on first €13k then
 Next €13k to €50k @20%
 Next €50k to €177k @40%
 Over €177k @45%

Tax Consequences
Corporation Tax after Brexit:
 Political factors – Government wants to:
 Encourage business
 Attract investment
 Attract holding companies
 Combat tax avoidance and aggressive tax planning
 Tax rate will fall from 20% to 17% by April 2020
Income Tax after Brexit:
 Historic origins
 If economy continues to do well, top rate likely to be cut
 Might use opportunity to simplify a very complicated system

Brexit - Conclusion
 UK will leave UK-EU relationship after
Brexit
 Brexit will be “Hard” to the UK as well as
The EU.
 They are having a temporary
relationship to maintain some works.
 UK law will be the same on Brexit but it
will gradually diverge over time

References
 Dhingra, S., Ottaviano, G., Sampson, T. and Van
Reenen, J., 2016. The impact of Brexit on foreign
investment in the UK. BREXIT 2016, 24, p.2.
 Hunt, A. and Wheeler, B., 2017. Brexit: All you need
to know about the UK leaving the EU. BBC News, 25.
 Van Reenen, J., 2016. Brexit’s long-run effects on the
UK economy. Brookings papers on economic activity,
pp.367-383.
 Sampson, T., 2017. Brexit: the economics of
international disintegration. Journal of Economic
Perspectives, 31(4), pp.163-84.

Queries
 Ask any question ???