Discussing and Evaluating the Impacts of Brexit on Business in the UK

This report provides a comprehensive analysis of the potential impacts of Brexit on businesses within the United Kingdom. It begins by defining Brexit and outlining the motivations behind the UK's decision to withdraw from the European Union, including a desire for greater economic independence ...Read More

DISCUSS AND EVALUATE THE
POTENTIAL IMPACTS OF
BREXIT ON BUSINESS

Table of Contents
INTRODUCTION ..........................................................................................................................1
FINDING AND DISCUSSION.......................................................................................................1
RECOMMENDATION ..................................................................................................................3
CONCLUSION ...............................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
The term Brexit is abbreviated as British and Exit which is depicting the decision of
United Kingdom related to withdrawal from the European Union. This was decided on the basis
of votes acquired by majority of British Voters existing in a referendum in year of June 2016
dated as 23rd. The main reason of doing so is to make UK independent in terms of commercial
activities, business operations and considering welfare of citizens of the country. According to
government, after being detached from EU, their nation will become able to improve current
economical condition by earning high amount of profits (Dhingra and et. al.,, 2016). In other
words, they want to be highly developed in comparison to other countries. The main motive of
designing present report is to discuss and evaluate the potential impact of Brexit on business in
context of United Kingdom.
FINDING AND DISCUSSION
The results and consequences of British referendum has totally appalled the entire world.
On 23rd June, civilians of United Kingdom give their precious votes regarding making their
nation independent in terms of commerce. In context to reach the pre - determined aims and
objectives, governance system of United Kingdom are attempting their best. But it is to be noted
that while going alone in the way of attaining success within corporate world, they are facing so
many difficulties. After getting outcome, UK has become the first and only country after
Greenland which have opted to withdraw from the European Union. All pandemonium had
broken loose with the pound of Great British taken a serious beating, explosion or burst of
governmental unrest & looming the uncertainness eclipsing the whole business environs. There
are various people who have different views and reviews regarding Brexit in which most of the
country people are in the favour of Brexit which can be identified in the voting of the
referendum. As the dust get settled, (Cumming and Zahra, 2016) has presented a brief look on
the assertable ramifications as well as positive implications of Brexit over business of UK. This
can be clearly understand by below mentioned points :
 Lower Direct Tax : For quelling the concern of the UK losing image and reputation as a
business hub, George Osborne (Finance Minister) has committed to minimise taxation
affiliated with corporation to less than 15 percent. As an outcome, this give business
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owners an additional funds for carrying out investment in the development of their
commerces.
 Achieve freedom in terms of making trade agreements : As UK has presented their
opinions of withdrawing EU, this has provide them a golden opportunity to make
commercial deals in all over the countries existing in this world. As per the Pollack,
2015 it has been found from an investigation that nations such as Australia and China are
ready to contact to UK for the intention of doing business deals after Brexit.
 Less obligations and regulations : For giving vote for leaving EU, United Kingdom is
not forced to obey each rules and policies made by European Union. It is now no longer
obligated for paying millions or billions of pounds as cost in order to maintain
membership in EU. Since Britain was considered as greatest contributor, they can spend
their all money for achieving commercial growth and maturation.
According to the view point of Busch and Matthes, 2016, there are some negative influences of
Brexit on the commercial activities of UK. Some of the points represented by them for proving
their statements are following :
 Exports of UK would take a hit : United Kingdom has done exports of around £133
billion worth of products that is almost equivalent to half of the worldwide goods export.
On the other hand, it is supposed that n UK would face a huge loss of around £4.5 billion
a year, if they will leave markets of European Union without doing any negotiation
regarding a new trade contract with EU (UK Trade: July 2015). Due to this, government
body of United Kingdom may be hit high in businesses export since their cost would get
rise up along with enhanced traffic rates. Thus, UK may become less competitive in the
market of EU and internationally also.
 Reduction in FDI : It has been identified that there is a significant 92% decline in the
foreign direct investment availed by the country (Foreign investment in the UK has fallen
92% since 2016. Why?, 2018)Therefore, it can be stated that after Brexit highest trading
costs as well as tariffs will probably reduce the investments in United Kingdom. This in
turn badly affects on the entire economy of UK.
RECOMMENDATION
For dealing with the antagonistic impacts of Brexit, Kumar, 2011 has suggested some
ideas which are discussed below :
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 In order to cope with the situation of reduction in overall number of exports, UK is
recommended to manufacture such an innovative good and services that is rarely
available in another countries. This can be accomplished by applying digital concept like
Artificial Intelligence while making products.
 For balancing or increasing the existing degree of foreign investments, governing bodies
of United Kingdom should make certain laws that should be able to encourage foreign
investments in the country. For example, they can offer low taxes on the trading of those
investors who are willing to work or start their business in their country (Gudgin and et.
al., 2018) . This will definitely seek attention of more and more overseas entrepreneurs
towards the UK.
CONCLUSION
By observing the above based report, it can be concluded that the decision of leaving the
European Union is proved to be beneficial for United Kingdom since it provided various golden
chances of enlargement and development to them. They can carry on their commerce in across
all over the globe without taking permission of EU. Thus, by withdrawing EU, UK will become
independent in context of conducting trading. They also do not need to pay high amount of
revenue for being their participants. But after leaving European Union, some of the bad effects
can also be faced by Great Britain. For instance, overall quantity of exporting will get reduced
which is not good for UK government. In addition to this, the probability of decrement in terms
of FDI is also seen after withdrawal from EU. This will negatively impact on the economic
situation of country. Therefore, legal system of this nation should try hard to over these issues by
referring above mentioned ideas.
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REFERENCES
Books and Journals
Boateng, A., and et. al., 2015. Examining the determinants of inward FDI: Evidence from
Norway. Economic Modelling, 47, pp.118-127.
Busch, B. and Matthes, J., 2016. Brexit-the economic impact: A meta-analysis (No. 10/2016).
IW-Report.
Cumming, D.J. and Zahra, S.A., 2016. International business and entrepreneurship implications
of Brexit. British Journal of Management, 27(4), pp.687-692.
Dhingra, S and et. al.,, 2016. The impact of Brexit on foreign investment in the UK. BREXIT
2016, 24.
Gudgin, G and et. al., 2018. The macro-economic impact of Brexit: using the CBR macro-
economic model of the UK economy (UKMOD). Journal of Self-Governance and
Management Economics, 6(2), pp.7-49.
Kierzenkowski, R., and et. al., 2016. The economic consequences of brexit.
Kumar, S.H., 2017. Impact of Brexit on Tata Groups. DHARANA-Bhavan's International
Journal of Business, 11(1), pp.29-32.
Pollack, M.A., 2015. Policy-making in the European Union. Oxford University Press, USA.
Online
Foreign investment in the UK has fallen 92% since 2016. Why?, 2018. [Online]. Available
through:< https://inews.co.uk/news/uk/foreign-investment-in-the-uk-has-fallen-92-
since-2016-why/.>
UK Trade: July 2015. [Online]. Available through:
<https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/
uktrade/2015-09-09>.
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