• Alfay Tax Solutions


Well that’s a well-used word these days and been used for quite a few events over the years from the old days of Black Wednesday – ok most people won’t remember that far back but more recently we have had both political and economic factors that impact on our lives and financial future.

On the economic front there is a current trade war between the USA and China one of the effects of which is a dampening down of the investment markets. No one knows how that will play out but it’s worth looking at businesses who have no interests in either of these giants although this still may affect other investment markets.

We have been subjected to, or experienced, whichever way you prefer to look at it to the demonstrations by the so called Extinction Rebellion.

Whilst their ultimate objectives may well be altruistic, the consensual science says that if we put into action their demands now, we would be plunged into poverty which is ironic as I’m sure they will still want to enjoy going on their flights to foreign destinations, driving to work and school, using their mobile phones and using gas and electric to cook and keep warm. Interestingly the UK has achieved the biggest fall in carbon emissions in the whole of the developed countries and expect to be carbon neutral by 2050.

The USA and China combined account for over 40% of all greenhouse gases and if you add in India (7.1%) and Russia (4.6%) then these 4 countries account for over a half of the planets greenhouse gases. It would seem to me that’s where our friends from Extinction Rebellion should be demonstrating rather than disrupting the lives of working people in the UK where we have made the biggest progress to make our world cleaner.

However there is clearly a move away from carbon intensive industries and if you or company are involved or deal with industries like that, its worth looking at the future to either diversify or restructure to mitigate the impact of reduced investment opportunities and returns.

I guess the biggest uncertainty as far as the UK is concerned is the “B” word!

It’s now been rumbling on for over 3 years and again no matter what your political view it has been the biggest hindrance to business planning probably in our lifetime.

It looks like an election will be the only way to finally resolve this one way or another but what is clear is what will happen in the short term to the value of shares and the value of the pound.

So if we leave with no deal as the Prime Minister says, then the value of the pound will fall sharply although it is likely to recover within a relatively short time depending on what approach the government will take to manage the risks of no deal.

Conversely the FTSE 100 is likely to RISE sharply because the value of most of the companies within it deal in US dollars so the fall in the pound makes them more profitable. Again this may be temporary as the value of the pound picks up again.

The biggest danger according to the financial markets would be a Corbyn led Labour government and it is likely that the value of the pound would still fall despite them likely to remain in the EU but may not be as severe as a no deal EU withdrawal.

The stock market however is likely to crash as the threat of Labour’s economic policies would drastically reduce profitability on bigger companies.

Even small to medium sized companies would have some severe loss of income due to their proposed policies of greatly increased corporation tax and employee minimum wages.

Interesting times ahead and no one can forecast exactly what will happen but to be sure, companies of all sizes should be doing risk assessments on their cash and trading viability to ensure that they aren’t hit by unmanageable events.

We can certainly help many business (Ltd Companies) in looking at risk and reward policies to mitigate potential corporation and income tax liabilities.

We have partnered with many Accountancy firms who refer business clients to us and been able to improve the net cash situation of many businesses.

In the current uncertain times give us a call to discuss how we can help you to do the same and protect the future viability of your business.

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