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February 4, 2020

2020 marks a year of transition for the UK, as we prepare to leave the European Union with a newly formed Conservative government at the helm. Technology is also transforming the world in which we live, the businesses of the future and the talent those businesses need to succeed

While there will no doubt be challenges ahead, these l changes also bring opportunities, for businesses and policymakers alike, to re-evaluate our position in the global economy and the policies that shape it.

In an effort to explore the ‘art of the possible’, A&M Taxand UK and Taxand commissioned macroeconomic research firm, Capital Economics, in Autumn 2019, to analyse and assess the tax system options available to the UK post-Brexit.

The result is a report that sets out nine policies in total, providing context, potential changes and overall economic impact of each. Based on the assessment process, and expertise provided by A&M Taxand’s experts, a list of policy recommendations has been made.

The emerging policies, independent of client or sector bias, cover a range of areas but all focus towards the same goals:

  • To support sustainable economic growth and investment after Brexit, both nationally and regionally
  • To increase the UK’s relative international competitiveness

Key findings

  • Free ports in the UK would create an average of 13,500 jobs and £800 million of gross value added per port
  • 10% rise in R&D spending by UK firms will drive an average of 1.3% increase in GDP
  • A 10-percentage point reduction in the rate of corporate tax leads to an increase in GDP of 1.2%, driving growth in regions across the country.
  • A combination of increased R&D incentives, creation of free ports and a regional corporate tax system with lower average rates could provide a 7% boost to GDP, amounting to £150 billion – or nearly £5,500 per household
  • Energy tax changes encouraging carbon reduction could make the U.K. economy greener while also cutting energy consumption by 1.2%

The report analyses the following nine policies and provides an impact assessment for UK plc if they were to be implemented:

  1. Increase in R&D and IP incentives
  2. Creation of free ports
  3. Regional corporation tax with lower average rates would increase GDP by 1.2%
  4. Energy tax changes could reduce UK carbon footprint
  5. Lower income tax
  6. Lower corporation tax rate
  7. Changes to / possible overhaul of VAT
  8. Simplification of the current tax system
  9. Establishment of a ‘unilateral free trade’ model

Click here to download the report

 

 

 

 


Click here for the U.S. commentary on this topic.

ABOUT ALVAREZ & MARSAL TAXAND

Alvarez & Marsal Taxand, an affiliate of Alvarez & Marsal (A&M), a leading global professional services firm, is an independent tax group made up of experienced tax professionals dedicated to providing customized tax advice to clients and investors across a broad range of industries. Its professionals extend A&M’s commitment to offering clients a choice in advisors who are free from audit-based conflicts of interest and bring an unyielding commitment to delivering responsive client service. A&M Taxand has offices in major metropolitan markets throughout the U.S. and serves the U.K. from its base in London.

Alvarez & Marsal Taxand is a founder of Taxand, the world’s largest independent tax organization, which provides high quality, integrated tax advice worldwide. Taxand professionals, including almost 550 partners and more than 2,500 advisors in 50 countries, grasp both the fine points of tax and the broader strategic implications, helping you mitigate risk, manage your tax burden and drive the performance of your business.