TAX AND SPEND, SPEND, SPEND
Posted on: 28 Nov, 19
It’s not only Christmas Shoppers who will be spending big this Christmas. Whoever ends up in No.10 has promised spending spree bigger than a week of Black Fridays. So, how will that (and the B-Word) effect your UK business, whether already here or planning to be. And what makes the UK such a good place to do business regardless of all the political shenanigans?
I mean depending on the industry you’re in, the big spending could be an absolute goldmine.
Two of the big themes that are coming from all reaches of the UK political spectrum involve spending on the environment and healthcare. The impact of such major investment won’t just be on big infrastructure projects and contracts won by big firms, but the many technology companies, service providers and niche products that are spread throughout the health and environment ecosystems and feed into those sectors. For years the message coming from those sectors is we need to improve efficiency but we have no budget for new IT systems which could help achieve this. It looks like that may now change.
It would be impossible to name all of the industries that would potentially benefit from big investment at the top but it is easy to see how technology companies involved in areas such as HealthTech, Life Sciences, CAD Design and SaaS to name just a few could seriously benefit from the money that will be ploughed in to various sectors by whichever party is in power come mid-December.
Wow! That’s the most optimism I’ve heard in months, maybe even years, when tied to UK politics.
I mean you’ve not mentioned Mr. Corbyn’s plans on the employment side of things that could pop that optimistic balloon for UK employers. How can the UK be a leading global marketplace with 32 hour weeks and 4 more bank holidays?!
But aside from that…when you’re talking about software and innovation in the UK, it doesn’t look like that the FinTech community is going to pack its bags at any point soon and move to Frankfurt or Paris does it, even with all their additional employment rights?
Exactly. The UK is the undisputed FinTech capital of the world. And the pillars that have made it so aren’t going anywhere regardless of the winds of political uncertainty blowing all around:
- The strength of the UK financial services market
- The nature of consumers, talent and access to capital in the UK
- The UK regulatory environment (Turns out the regulatory body’s rebrand from FSA to FCA in 2008 was more than window dressing)
And this isn’t just patriotic chest-puffing (which we’ve seen far too much of recently).
The Department for International Trade’s “State of the Nation” report into the UK FinTech market more than backs it up.
If you’re in FinTech or wanting to get into FinTech then the UK simply has to be on your map.
Absolutely! That’s not to mention the beautiful, big tax giveaway that is R&D Tax Credits.
If your business can show that it is resolving (or attempting to resolve) some kind of scientific or technological uncertainty, whatever that may be, then it could benefit massively from such a generous tax relief.
It sounds complicated to claim but businesses are always surprised at what activities qualify so it’s a must to explore, particularly where you are involved in the HealthTech, FinTech or environmental sectors.
And it isn’t going anywhere. If anything, further support has been announced, and Brexit would mean an end to state aid rules (meaning that if you received help from the EU in some shape and form it could restrict your ability to then claim R&D tax relief in the UK…not anymore).
Great point. The numbers really do stack up when you’re looking at the UK despite the circus going on all around us.
Coming to the UK to start or expand your business isn’t just about the numbers, though, is it?
I mean, aside from the technology, the talent, the access to capital, the thriving financial services industry, the tax reliefs, the ease of setting up a company, the (relatively) stable currency…all the political goings on don’t take away from the fact that the UK is a wonderful place to live, work and visit.
Maybe we’re blowing our own trumpet a bit but I think most people would agree that the UK has a wealth of history, culture, music and beautiful architecture to explore.
It is a place to come and see some of the greatest sport in the world…the place of David Beckham’s right foot, David Beckham’s left foot for that matter…(it’s coming up to Christmas so I think I’m allowed to quote Love Actually right?!).
But seriously. Wanting to start a business and bring your family halfway across the world? Then you want to come to a place where your children will have the opportunity to benefit from a world-class education.
And, in the main, the UK is a place where people are treated fairly and given a chance to get started.
And you don’t get taxed as a successful entrepreneur foreigner on anything other than your UK earnings when you do move here.
The fact that we are an English-speaking country doesn’t hurt either!
Of course, Brexit or whoever wins the election has an impact day-to-day but it doesn’t change those broader considerations you have when considering moving your life to the UK.
I couldn’t agree more! And moving to the UK will undoubtedly change.
Movement between the EU and UK may be subject to certain bureaucratic restrictions meaning standing in a different…ok longer…queue at the airport but the expectation is not that we are pulling up the draw-bridge and making things really difficult.
Potentially the biggest change could be greater ease of movement for certain Commonwealth countries.
For those companies from Commonwealth countries with the right offering, finances and ambition to expand to the UK there are so many benefits to exposure to a UK market that is bigger than their domestic market.
And if the visa hassle can be minimised then that could be incredibly exciting.
Have I missed anything in all the excitement?
Maybe just one thing. For any companies dealing in the import of goods to the UK…get your VAT in order in preparation for the UK’s changing relationship with Europe.
Make it your New Years’ resolution to make sure you are ready for the changes to VAT. It will probably be cheaper than a gym membership, and you’re likely to get more use out of it!
And VAT on services? The good news is that won’t change much.
I guess what we’re trying to say is that we know this whole uncertainty and Brexit and elections is frustrating. But in an ever-changing world, with all that is going on the UK, there is much about the UK that remains unchanged…and it remains an incredibly good option for setting up and expanding your business.
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We are but two fictitious characters throwing out ideas and comment to stimulate debate and collect information. As professional service firms, we are open minded people and think independent thought and debate is essential to help understand, as well as navigate, complex problems. By joves – doing business across Europe (and the world) is set to become a whole lot more complex in light of recent seismic political events. As businesses - we provide information and hopefully some wisdom - and we see this blog and its caricatures merely as a much more fun, perhaps slightly controversial way, of stimulating debate and collecting ideas. We’re searching for some true pearls of wisdom, and as we find them, we’ll share them with you.
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So, the political parties are out in force, Oury. Promising to spend big on…well…pretty much everything. I’m still trying to figure out what makes sense most, who’s lying least, and whether that will be good for UK businesses?!