Britannia Unchained
The UK budget of September 22 is a radical change of direction from the last 10 years of UK government financial policy.
It represents a growth strategy with the vision of low regulation and structural supply side changes with the aim of faster growth in the UK economy for business in the coming years.
What are the opportunities for Expats working across border with the UK?
Regulation
A raft of regulate regulatory changes to reduce and simplify have been signposted and additional announcements to be made in October & November.
For Expats looking looking to work in the UK at his includes a further easing of business regulation and immigration rules into the UK.
On the 23rd of November a medium term financial plan will be set out setting out details of these proposed changes.
First Cut
The headline of this budget was tax cuts costing 1.5 % of the total turnover of the UK economy - GDP
The initial fear when announcing tax cuts is that government debt will rise. That is only true if the growth achieved from the stimulus package is less than 1.5% cost of the tax cuts.
How will the UK Tax Changes Affect Expats
If 3% growth is achieved going forward then government borrowing will continue to fall.
This is the radical difference in the new government’s strategic approach to the British economy and business.
Not pay down debt and let growth spread from the ground up.
But to spread the fertiliser , water the seeds and see if the British economy ( and government) comes up smelling of roses from the resulting economic growth.
Unchained
This is an opportunity to unchain the UK from the EU model of regulated markets.
Hong Kong, Singapore are among vibrant economies on the global stage vying for expat business. As the IT revolution grows apace business learns that it can operate remotely, online and across border, with people driving a new generation of business model.
If the UK wants to be a financial, business and technology centre then it needs the environment to take advantage of the opportunities arising.
A low regulation, low tax economy unchained from the shackles of the past is better able to grow into the opportunities ahead. Opportunities created by technology and a rapidly growing and young global population.
Investment Zones
The UK has long planned introducing enterprise and investment zones along the lines of Freeport’s seen in the Middle East and other countries around the world.
Freed from EU constraints - to not discriminate against any other EU business, the UK can now establish low tax investment zones.
This could offer lower cost investment opportunities for expat business to build business in the uk with low payroll taxes and business rates.
Property Tax Relief
UK property taxes have risen dramatically over the last 7 years.
The sales taxes for capital gains or death remain but the purchase tax , stamp duty is reduced significantly for smaller value purchase and expat buyers of uk property.
Tax on Income Aligned
Corporation Tax and Personal Income Tax are adjusted and will both be 19% going forward.
This reduces planned corporate tax rises.
The intriguing opportunity arises now for enterprising small business builders to pay a maximum 19% tax on earnings as corporate or income tax.
Of course the income tax is higher above the basic rate , although only to a maximum 40% now, but a business owner and investor can now leave profits in the business and pay the same tax as drawing.
This could mean more funds for the business to invest in growth.
Increase in dividend and national insurance taxes are also reversed.
A dividend income strategy remains good for a small business contractor in the UK.
Entrepreneurial Relief
The biggest release from tax constriction on small business enterprises in the UK is the removal of the IR35 rules for personal service companies. IR35 in this context did much to destroy the Personal Service Company (PSC) model for contractors developing new small business in the UK.
The liability for tax returns and payment now reverts to the contractor running his business- not the contracting company.
For expats Living and Working Abroad using a UK PSC this now remove a significant block to business development which saw many opportunities for business lost or leave the UK.
The UK PSC now looks like a vibrant low cost limited liability tax residence that allows contractors and nomads around the world a way to follow the tax rules at low cost and with tax efficiency.
Free Review
Contact us for a consultant review on how your expat business can thrive in the new unchained growth economy of the UK.