Brexit Thoughts #4: Tax

Who will pay tax and how much after Brexit?

 

It’s a question that will send a shudder down the spine of the Chancellor but it will have huge implications for some.

 

There is no doubt that the rest of the world has lost confidence in the UK in a post Brexit world. We haven’t left the EU yet……but just look at the exchange rate against most major currencies and a similar story is told. A weak pound is a consequence of weak confidence.

 

To combat this and to get overseas investment into the UK at a time of low confidence requires tax breaks……a sweetener to make us look more attractive. Lipstick for the economy. A reduction in Corporation Tax for businesses and lower Income Tax has been promised……but it comes at a cost. How will the sweeteners be paid for? It isn’t as simple as borrowing the money on the UK credit card or cutting public services.

 

There is no doubting that offering lower Corporation Tax to stimulate economic activity once the UK has left the EU could mean more companies choose to move here, invest, create jobs, create tax receipts, etc. But the benefits will take years to filter through.

 

Which brings me back to the original question…… Who will pay tax and how much after Brexit?

 

Those sweeteners need paying.