UK government policies driven more by politics than economics
The new Conservative government has announced its first annual Budget, to be held on 11 March 2020. It is perhaps one of the most important budgets of the past decade, being the first post-Brexit Budget delivered at a time when international trade negotiations gather pace.
It will, however, be a budget driven by the cold hard facts of domestic politics rather than an ambitious international outlook.
Boris Johnson’s majority government has drawn a wide range of voters to his ‘Get Brexit Done’ banner, many from the Midlands and Northern traditional Labour heartlands. And whilst the government may wish to play-up its international credentials showing the country as an attractive place for international businesses, the 11 March Budget is likely to focus on domestic issues to reward and keep new conservative voters happy.
Politics, not economics, will be the theme of the 11 March Budget.
There is also the reality that previous UK governments from the past 20 years have created a tax environment that shows Britain is open for and a good place to do business.
Overseas investors and businesses are constantly surprised that there is no withholding tax on dividends. The UK also benefits from a strong double tax treaty network and comprehensive R&D tax credits and Patent Box regime. Even our frequently criticised non-domiciliary rules are being replicated by other countries.
The new government is unlikely to want to make any major changes when businesses and investors are calling for a period of consistency.
Businesses looking to invest or who have operations in the UK can expect small tweaks and a March Budget that focuses on the UK regions.
We will be publishing a series of detailed Budget updates in March. Watch this space.
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