For anybody watching the financial markets last week, the Brexit vote definitely had an impact. If you’re wondering what you should do to respond from a business perspective, taking a wait-and-see approach is likely better than jumping to action.
Here’s why: First and foremost, it will likely be several years before Britain can map out its complex disentanglement from the European Union (EU) and implement changes. The transition will likely face further delay because the actual submission for exit must wait until there’s a replacement for current British prime minister David Cameron. (Cameron indicated he is unwilling to give the EU notice of intent to withdraw.) Even after the withdrawal proceedings officially commence, Britain and the European Union (EU) will need to establish a transition plan.
For the moment at least, expect business to proceed as normal, perhaps with additional volatility in the financial markets. Here’s what else to expect:
- The press will continue to discuss the vote’s political ramifications.
- Important questions about the integrated, value-added tax and customs systems within the EU must be addressed.
- Tax structures will need to react to the new relationship between Britain and the EU.
- Legacy tax treaties Britain has with individual EU countries will become more important and may need to be renegotiated.
- Britain’s exit from the EU may impact the movement of employees.
Britain and the EU are entering uncharted waters. These are complex issues that won’t be settled today, nor in a few weeks, and they’ll be accompanied by opportunities and challenges.
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Moss Adams LLP is vigilantly monitoring developments related to the vote and considering the impact on our clients. If you have any questions or would like to speak with a professional regarding your specific circumstances, contact your Moss Adams professional or email internationaltax@mossadams.com.
Mazars UK—one of our affiliate firms through Praxity, AISBL—also provides insight into some of the tax implications of the Brexit vote.