The uncertainty surrounding Brexit looks set to continue. Despite months of negotiating and squabbling in the House of Commons, Britain remains lost in a damaging state of limbo. The original deadline has been and gone, with Theresa May recently agreeing to extend the exit date until 31st October.
Even the manner of the UK’s exit remains completely shrouded in mystery, with the prospect of a hard Brexit (or even no Brexit at all) still lingering very much in the air. Either way, from slowing the economy to causing a drop in house prices, the current state of gridlock is starting to have a real impact on businesses, finances and seemingly every other major aspect of British society.
For those running their own limited company, these high levels of uncertainty are proving particularly concerning. After all, when you’re responsible for your own income and livelihood, a time of doubt and ambiguity is undoubtedly the last thing you need. Unfortunately, the potential impact of Brexit still remains completely unclear…
Setting Up a Limited Company
Since nobody knows exactly what will happen once Britain finally leaves the EU, many people are feeling hesitant in setting up their own limited company. The endless state of uncertainty means workers are preferring to stick with more stable forms of employment, waiting to see how Brexit will affect employment rates and the economy as a whole.
Although this hesitancy is completely understandable, there has been absolutely no evidence to suggest that you should put off setting up a limited company until after Brexit. Of course, the prospect of setting up your own business in the midst of such political uncertainty may seem incredibly daunting, but there will always be risks involved when starting a limited company—no matter when you decide to set things up.
At this moment in time, there don’t seem to be any financial benefits in postponing the creation of your business, and registering at Companies House before Brexit will actually mean you’re protected by existing European legislation—even after Britain has left the EU. In fact, since the deadline has been delayed until October, you’ve now got around 6 months to develop a strong brand presence and ensure you’re ready just in case Brexit does present any damaging implications.
Existing Limited Companies
If you’re already set up as a limited company, then you’ll be relieved to know that Brexit won’t impact the status of your business. Despite Britain no longer being a part of Europe, there will certainly be no need for you to change your business’ name or re-register at Companies House, while even non-UK residents can still set up and run a UK limited company after Brexit.
Although things may change over time, particularly when the UK begins implementing its own laws and regulations, the incorporation status of your company won’t be affected by Brexit any time in the foreseeable future.
Tax Implications
Post-Brexit VAT is yet another factor which remains perfectly unclear. Once Britain has left the European Union, it will be free to introduce its own tax legislation, which will hopefully prove incredibly beneficial to limited companies all over the country. However, such is the current level of uncertainty, there’s also a chance that these tax implications could prove quite damaging.
Everything surrounding Brexit remains nothing more than rumour and conjecture but, one way or another, VAT is expected to see some of the biggest changes following the exit. However, the scope of these changes seems largely dependent on the manner of Britain’s withdrawal from Europe, since a hard Brexit would see Britain completely separated from the existing EU tax system.
Of course, in the event of a no-deal exit, the British government will undoubtedly hope to keep VAT procedures similar to the existing process, but tax paid on European imports and exports will likely be affected in some way. If your business relies heavily on trading across Europe, then you’ll want to check out the government’s guidance on VAT in the event of a no-deal Brexit.
Although a hard Brexit remains unlikely, limited company owners need to make sure they’re well prepared for every scenario.
Summary
The impact of Brexit remains shrouded in mystery, and looks set to stay that way for at least another few months. However, the growing uncertainty shouldn’t put you off the dream of starting your own limited company, while existing business owners shouldn’t panic about potential tax implications. Right now, the only certainty we have is uncertainty itself.