Brexit Article - “Should we stay or should we go? A question finally answered.”

Battle of The Bands: The Clash vs The Conservatives

The Conservative Party were not alone when deciding whether staying or remaining was a decision best answered by the British public. In 1981, English punk rock band The Clash blessed the country with the track ‘Should I Stay or Should I Go?’ which, strangely enough, became their only UK number one a decade later. Prestigious music magazine Rolling Stone then ranked it as one of the ‘500 Greatest Songs of All Time’, an accolade to say the least.

Despite all this, when then-Prime Minister David Cameron proposed that same question in 2016 over Britain’s future in the European Union (EU), he didn’t quite ignite the same fire in our bellies in the way that Mick Jones had done all those years ago. When asked about the meaning of the song, Jones explained how “it wasn't about anybody specific and it wasn't pre-emptive”, which is peculiar as I believe Brexit had a similar feel itself. Now of course everybody took their sides, the dinner table was divided, the dreaded online arguments commenced (the ones we all love to criticise but can’t keep ourselves out of), yet there was always a sense that nobody actually knew what the outcome of the referendum would entail.

“It's always tease, tease, tease”

Now amongst all the uncertainty, there were still key areas for concern which would undoubtedly be impacted by the status of our EU membership. First and foremost, there was the ‘EU Exit Charge’, which was the price we would be entitled to pay to leave the European Union - a number which unsurprisingly received great speculation. Another major influence upon the public’s decision was immigration, more so the three million EU residents residing in the UK and the one million plus expats currently living in other EU countries. Lastly - and arguably the most important consequences of this decision, and the consequences which I will discuss throughout this article - will be the changes it will make to UK/EU trade relations and how it could affect taxation in the UK.

“If you say that you are mine, I will trade tariff-free 'til the end of time”

A recurring worry for the Remain camp was that leaving the EU would risk our access to the single market which would force businesses to pay tariffs if they wished to trade with former EU members. This is quite obviously an undesirable scenario as it would discourage foreign trade, and consequently harm the economy. The hub of EU banking and financial service providers is arguably located in the Big Smoke itself - London. This threat to EU trade relations has caused great scare in the industry as some firms look to relocate in hope of preserving their ability to operate and sell their products cross-border without facing any restrictions. However, the counter-argument is the importance of the UK’s trade to other EU members; as some claim, it would be just as detrimental to other countries to lose our custom as it would to us, encouraging them to develop unique trade deals to compensate and maintain current trade deals.

The Conservative government have promised, in their manifesto, that free trade will continue outside of the EU - however, this may not cover all goods and services. It is hard to believe all forms of trade will remain unchanged following such a huge political shift, but what is equally difficult to understand is the abandoning of so many long-established trade deals at the expense of so many businesses. It appears to be a case of ‘time will tell’ as the Brexit process remains in its very early stages and continues to evoke a great amount of uncertainty - one which will hopefully subside over the next few years.

“One day is fine and next is VAT”

EU members have always had the power to control their own taxation as long as it obeyed the EU treaty. However, all members have adopted the same VAT system, and by leaving the EU, the UK may have to begin treating inbound deliveries as imports, generating an import VAT on goods crossing the border. Exports to former EU member states would also impose an import VAT due in the country of import. This was a concerning factor for many big businesses in the EU referendum as they do not wish to face these additional costs that could ultimately discourage trade across borders. Again, this is a likely scenario following our EU exit, but we may see unique trade relations formed in which the UK are compensated for due to their importance to the single market.

“If I go will there be trouble?”

Trouble may be imminent but ‘if I stay it will be double’ rings loudly in our ears as neither option appeared without its threats.

I hoped to have shone some light on how Brexit will be impacting our lives from a tax & economical perspective. It is evident that the progress of the Brexit negotiations will be a slow and tiresome one as the whole process continues to be rather anti-climactic. A lot of promises and threats are being made when, in reality, not that much appears to be happening. I think we will have to be patient on this one and trust that our government are doing all they can to achieve the best circumstance for our country. Whether this will involve Theresa May going acapella in front of the European Commission - “this indecision's buggin' me, if you don't want me, set me free!” - I could not honestly say, but I imagine it is likely.

At this moment in time, anything seems possible. Let’s just hope that, regardless of its obscurity, the outcome achieved is a positive one.