In the wake of the EU Referendum result, there is understandably much uncertainty about the future. In the days and months ahead the path forward will become clearer, however for now it is important to be prudent while we wait for definitive answers.
At any time it’s important to be as prepared as as you can be for whatever life may throw at you, however in times of uncertainty this is more vital than ever. Some issues may have become more pressing right now for our clients, so our specialists have compiled their thoughts on some key areas to consider following the Leave result.
If you have any specific questions about these or any other matters, please get in touch and one of our legal, financial or property experts will be happy to help.
It is understandable that on the brink of such a large decision that this result may give some people pause. However there are many key aspects involved with buying and selling property that have not changed since Friday.
There is still a lack of stock on the market and demand is still greater than supply. ESPC reports that stock levels are down 25% versus this time last year, so demand from buyers is still there.
As in the past we have seen that while in times of uncertainty activity levels may fall in property sales, property on the whole tends to remain a resilient market - during the 2008 global recession property values in Scotland were not affected as dramatically as in other parts of the UK.
Over the past couple of years the property market has already been through a lot of change - going through our own Scottish Independence Referendum, changes to Stamp Duty Land Tax and the introduction of Land and Buildings Transaction Tax. Despite this, we’ve seen solid growth, with Registrars of Scotland showing increased sales volumes of 18.2% year on year. Importantly this growth has been steady, rather than the bubble seen in 2007, so the market is in a good position.
Finally interest rates are already very low, but there is the prospect of them falling even further, potentially allowing even more buyers to enter the market stimulating further competition.
There will always be variation across areas, so it’s important to get advice specific to your local market. If you’d like to get a better picture, speak to one of our property advisors in your area.
Small and Family Businesses
The immediate uncertainty following the result may not have been helpful to small business owners, however it is expected that this will settle down over the coming weeks as the UK economy is in a relatively strong position. Many leading financial analysists are confident that the effects of the initial market reaction will not be as dramatic as some have predicted.
In terms of the approaches of small business owners, there may be upsides and downsides depending on your position. Many may welcome the loosening of EU regulations, while those that employ people from other EU countries may have to plan for changes in labour availability or costs. A drop in the pound may be good news for exporters and for those looking for commercial property opportunities, now may be an opportune moment.
For the moment the general consensus is business as usual, and this will be the case for the foreseeable future while the UK remains a member of the EU and bound by its rules. In the coming months and years, different sectors may face their own challenges and opportunities, but for now what we would advise is be prepared! If Britain does create its own new employment laws and regulations, there may be a lot that needs to be done to meet any new criteria. Ensure you do an appraisal of what aspects of your business may be affected, start making contingency plans and do what you can to prepare for an exit.
For example, if your business involves trade with EU members, it may be a good idea to look over your contracts now to check how VAT is defined, in order to ensure it continues to apply as you expect following the UK’s departure.
With regards to employment law, there does not seem to be much call for a total recalibration of current UK legislation. However much of this is set by EU guidelines and therefore could be subject to change in the future. Again it would be beneficial to review contracts now to identify what areas could be affected once Britain has negotiated its exit.
If you need help assessing where your business may be vulnerable and to identify what can be done to safeguard it as far as possible, ask about our free 360 Business Review Service.
Does this change my personal tax situation?
In short, no, for the moment. Major taxes such as income tax, National Insurance, Inheritance Tax and Land and Buildings Transaction Tax (LBTT) are all set by the UK and Scottish Governments. These have not changed and are unlikely to because of the referendum result.
The Chancellor George Osborne has said that he currently has no plans to issue an emergency Budget in wake of the Leave result, however if this changes at a later point it is a possibility that he may choose to increase some of these taxes to raise capital. In light of this it is more important than ever to ensure that you have taken individually tailored advice to put robust tax planning measures in place.
To review your current provisions and ensure that your tax planning is as robust as possible, speak to one of our advisors about arranging a free 360 Lifestage Review, which evaluates your current circumstances and help ensure the things that are important to are as protected for the future.