Retain more of your wealth in uncertain times!
What exactly do we mean by “uncertain times?”
Well to name but a few issues
Brexit and its implications
Possible election shortly
Potential of taxes increasing
Oil prices volatile due to the terrorist attack on Saudi oil production
USA trade war with China and sanctions on Iran
Well, all of the above can have an impact on the ability of businesses in the UK to grow and thrive as they drive the economic factors on confidence in the markets and job prospects.
Whatever your political leanings it can’t have escaped your notice that at the Labour party conference they agreed motions which could have wide ranging impacts on Ltd companies in the UK.
Their agreed policies amongst others include a sharp increase in Corporation tax form the current 19% to 26% over 3 years.
What that means is that for a business with profits of just £200k their corporation tax bill will increase by £14,000!
Labour say they will be able to raise around £20 Billion from the increase by simple arithmetic but the respected Adam Smith institute have a different view on the impact of this.
The Adam Smith institute comment that a 9% increase will not raise as much revenue as a 1% increase, because economy and business do not remain static while politicians fiddle with the tax rates. People and companies react to changes, and the bigger the change is, the more they react.
One thing that is well evidenced is that higher tax rates generally result in lower than expected revenues!
Labour haven’t said what they would do with dividend income tax rates (currently 7.5%, 32.5% and 38.1% depending on income tax band) but if their past history is anything to go by then these would be greatly increased also which would be a double whammy on smaller to medium sized businesses and leave the owners considerably worse off.
Add in their plans for companies of a certain size to hand over 10% of their shares and a seat on the board then many Directors will be concerned the impact on their ability to grow and develop their business.
We don’t know if a Labour Government is likely at the next election or even when an election will be held but given the current paralysis it surely has to be soon.
If any of the above is of concern to you and the potential development of your business then we have some ideas to ensure that you retain more of your wealth and even if we don’t “enjoy” a Labour government in the short term we can still help you going forward.
Please contact us for a confidential chat