A new landscape for Family Businesses?

At 10pm last night, the 8^th of June 2017, the polling stations closed and the counting across the UK began surrounded by excited discussions about the exit poll results which were released at the same time. The exit poll has proved to be one of the most accurate in election history and was an early indication of the political landscape. As the sun rose this morning, the 9^th of June 2017, the UK has a hung parliament.

Whilst it will undoubtedly take days for the political dust to settle and the future government of the UK to emerge, the impacts of the result are already being felt within the economy with immediate consequences for family businesses throughout the union. The exit polls created an immediate drop in the value of the pound, a fall that further increased as the results were announced in constituencies across the UK; at 9am the fall was in the region of 2%. This fall will undoubtedly place increased pressure on businesses which are trading in euros and dollars today, an unwelcome challenge for these businesses.

With political uncertainty comes economic uncertainty, although we do know what the respective parties have pledged through their manifestos, which allows us to at least have some concept of what impact tax changes are likely to have. Whichever way you voted, we know that for companies corporation tax will continue to reduce to 17% if the Conservatives form the government, or rise to 26% if Labour need to step in. We don’t expect any increase in VAT although the future of personal tax rates will certainly depend on the party governing our country.

The next few days should offer some clarity in terms of the next five years for the UK, which will further confirm financially how family businesses will be impacted. Regardless of the outcome, family businesses will continue to face an ongoing period of transition with Brexit creating challenges as well as opportunities. It has never been more important to ensure that you have the right team with your business, supporting and advising you on the changing financial and strategic landscape, whilst always ensuring you, your family and ultimately your business are protected for years to come.