Some millennials think that Brexit has nothing to do with their lives. But little do they know that Brexit negatively impacts many aspects of people’s lives, including taxes. Lynton Crosby CEO of CT Group explained that the impacts of Brexit on taxpayers in the UK can be quite hard. Many aspects, such as compliance, cost, and the ability to optimize a tax position, will be affected. But the real question for millennials is why they have to learn about the impacts and some tips to make their lives easier. That’s why today, we’re going to shed some light and explain how Brexit affects UK taxpayers.
No More Certain Tax Benefits
One of the major impacts of Brexit on UK taxpayers is that they will no longer be able to take advantage of certain tax benefits. This includes, but is not limited to, the ability to move capital gains and dividends freely between EU countries without incurring any taxes. This means that if you had investments in another EU country, it would now become a lot more expensive to move those investments around. Not only will you have to pay taxes, but you will also incur additional costs associated with currency conversions.
No Access to the Single Market and Customs Union
The UK leaving the European Union also means that it will no longer be part of the single market and customs union. This means that businesses trading with other EU countries will now have to comply with different rules, regulations, and taxes. For example, if you are selling products in another EU country, you may need to get a VAT number and register in the country before you can start trading. This will add additional costs to your business and make exporting more difficult. Therefore, Brexit is not only affecting UK taxpayers but also small businesses that rely on exporting to other EU countries.
No Access to Certain Tax Breaks & Incentives
In addition to those, the UK leaving the European Union also means they will no longer be able to take advantage of certain tax breaks and incentives. This includes things like the Entrepreneurs’ Relief, which allowed entrepreneurs to reduce their capital gains tax liability when selling a business. This could have a huge impact on businesses that rely on these tax breaks to be profitable. Will the UK government introduce similar incentives for businesses once Brexit is complete? It remains to be seen.
Less Ability to Optimize Tax Position
The UK leaving the EU also affects taxpayers’ ability to optimize their tax position as they no longer have access to certain tax exemptions or deductions offered by other EU countries. For example, in some EU countries, individuals can claim deductions for certain expenses, such as travel and entertainment costs. These deductions are no longer available to UK taxpayers after Brexit. Therefore, individuals may need to consider alternative ways of optimizing their tax positions.
In short, Brexit has led to many changes that affect UK taxpayers. They no longer have access to certain tax benefits, the ability to move capital gains and dividends freely between EU countries without incurring any taxes, and they are less able to optimize their tax position due to the lack of deductions available. Therefore, it’s not a bad idea or a waste of time to learn more about the impacts of Brexit and how to minimize them. Stay tuned for some tips to minimize the impacts, and you’ll ensure that you are taking full advantage of all available tax benefits and minimizing your tax liability.
