Since the EU referendum result, in which the UK voted to leave the EU with an overall 52% to 48% majority, many clients have been asking us how this will impact them, both personally and financially. In this newsletter, we look at some of the “knowns” and “unknowns”.
At present, as highlighted in the media, the only thing we are certain of, is that nothing is certain. Interestingly, David Cameron chose not to invoke Article 50 of the Lisbon Treaty immediately after the referendum results, despite hinting before the vote that he would. Instead, he tended his resignation and left that to the new incoming Prime Minister to action. Only once Article 50 is invoked, is the UK committed to an exit from the EU with a two year timeframe for negotiations. That means, as of today, nothing has officially changed and the UK is still a member of the EU.
The other interesting development was the Chancellor, George Osborne’s decision to postpone the emergency budget he had originally suggested would take place immediately after the vote, with promises of tax rises and other austerity measures that would be needed to plug the projected £30bn hole in the UK economy.
We can, however, expect a new budget once the new Prime Minister is in place, likely to be at some point in October 2016. The open question is whether we will see the type of tax rises that were suggested before the vote, namely a potential 2% increase in basic rate tax (up to 22%), 3% increase in the higher rate (up to 43%) and a 5% increase in inheritance tax (up to 45%).