Why I am voting for certainty and stability
Talk to any tax expert about the UK tax system and the words ‘complexity’ and ‘certainty’ will crop up. We want less of the former and more of the later.
The constant fiddling with the tax system is partly due to political change. Whenever there is a change in government the new chiefs want to implement their own bright ideas, which results in another 600 pages of tax legislation - every year. So political change creates more tax upheaval.
If the Great British people vote to Leave the EU on 23 June 2016, the political and economic upheaval will be immense and on-going for years.
In the short term there will be another emergency Budget in which the government will set out its priorities for to changes to the tax and regulatory regime. For those changes will be needed.
There are thousands of statutory instruments that take account of EU law which would have to be reviewed, and someone (a civil servant, a minister?) will need to decide which of those regulations are to stay and which will be repealed. This alone creates huge uncertainty for businesses as they won’t know which regulations will continue to apply and for what period.
Any business which trades across international borders will suffer the double uncertainty of volatile exchange rates and the prospect of tariff barriers going up between the UK and the rest of the world.
In the short term trading agreements with other countries will remain in place, until the UK actually leaves the EU. However, no-one knows how long that leaving process will take. Greenland (population about 56,000) is the only country which has ever left the EEC, and that took three years.
When the UK’s membership ties to the EU are finally cut the trade deals which the EU made with non-EU nations will fall away for the UK. Those deals will each have to be renegotiated on country by country basis, and who will do that? The UK does not have a team of experience trade negotiators as that job has not been done from within the UK for over 40 years.
Uncertainty over regulation, trade tariffs and tax reduces business confidence and dampens growth, as businesses hold back on investing and consumers restrict spending. If the economic slowdown turns into a “technical recession” as Mark Carney, Governor of the Bank of England predicted, businesses will go bust. This will hurt the advisers and accountants for those businesses and of-course their employees.
Martin Lewis, founder of Moneysavingexpert.com has described the decision on how to vote in the EU referendum as an exercise in risk assessment, which can be summarised as:
- If you think you don’t want to take the risk that the economy could go bad – vote to remain.
- If you think that the economy is bad already and you are willing to take the chance that it could get worse, in the hope that it will get better – vote leave.
I’m totally with Martin Lewis on this. I am a risk-adverse person so I am voting to remain.
Every thinking person who is entitled to vote should make the effort to have their say in the EU referendum. Unlike general or local elections every vote counts.
If you have moved house recently you may have fallen off the electoral register. You can register to vote at www.gov.uk/register-to-vote. The deadline for registering to vote in the EU referendum has been extended to midnight on 9 June.