Impact of Brexit on Limited Company Formations
Due to the current Brexit chaos happening in the
European Limited companies might have an impact. Many business owners have
expressed their worries about the effects of Brexit in business operations.
Moreover, the business owners who are yet to form their limited company in the
UK have expressed their concerns about their future options.
However, there is no certainty about the happenings on the UK business economy after Britain exits the European Union.
Nevertheless, you can go through the discussions provided below to get an idea of the impact of Brexit on limited company formations.
Impact on existing Limited companies:
If you already have a business that is registered in England, Wales, Scotland or Northern Ireland, then no need to get worried as currently, there are no changes in your business operations after Brexit. Your rights are protected under well established UK corporate legislations.
Is there any effect on residential status?
In spite of your residential status, your UK company incorporation will not have any impact once Britain leaves the EU. Therefore, if you are a UK citizen, EU citizen, or a resident of any non-UK country, there will be no changes in your company status.
Impact on upcoming limited companies:
As per the recent information, there will be no effect on company formation in the UK because of Brexit. If you are holding your company formation in the UK due to the concern of Brexit impact then it is not worth it, as there will be no added benefits to your company formation if you wait till Brexit to happen.
VAT and Banking implications:
It is an anticipation that there will be some significant company VAT rules post-Brexit. This is because Britain will no longer be a part of the common VAT system that is based on the EU VAT law. However, many financial experts have predicted that this will be highly beneficial to UK companies with an expert business attitude.
Affect on Corporation tax:
As per the current scenario, the UK maintains the lowest Corporation tax rates as compared to all major economies across the world. The current government has planned to minimise the rates of corporation tax despite the results of Brexit. Hence, the UK still encourages investments from company incorporations. There may be plans to reduce the corporation tax levels to 15% in the near future. This will help to offset the impact of any new import or export costs and customs duties.
Impact on customs control:
It is still not disclosed that exactly what impact Brexit will have on the EU imports and exports. However, as per the anticipation of some business experts, many companies in the UK will experience an increase in the numbers of UK based customers as a result of likely import or export charges. This will be advantageous for the customers as they will actively source whatever they want quickly and cheaply and in a hassle-free way. Furthermore, this will help to avoid import charges and filling out customs documentation, which will in turn help to increase sales in the UK.
Affect on company formation:
It can be reassuring to know that going through the company formation process will protect you from any financial fallout. After incorporating your business, it will become its entity in its own right. This implies that the UK law will provide you with more protection as a Limited company than as a sole trader, normal partnership or unincorporated business. Company incorporations will also become very cost-effective.
Therefore, there is hardly any effect on company formation due to Brexit. Moreover, as per the predictions post-Brexit, it will be highly beneficial for company formation in the UK.