The economic consequences of Brexit
Poll: The economic consequences of Brexit
Total Members Polled: 732
Discussion
Jockman said:
Just took delivery of our new CNC last week from SCM.
Not quite enough to use up our capital allowances but last year's biomass plant was !!
Thing is, whether you're looking at industrial, construction or agricultural machinery, £250k does not buy much these days. The allowance is piffling. An all-singing-and-dancing multi-axis, large capacity CNC machine is IRO £0.5m to £1m.Not quite enough to use up our capital allowances but last year's biomass plant was !!
The tooling alone for our new (mid-sized) machine tool will be about £20k, all in.
Digga said:
youngsyr said:
At what cost though?
The government doesn't have limited resources, so that shiney new kit in the Italian factories will be at the cost of supporting other businesses.
I'm not saying that ACAs aren't helpful to some businesses, I just believe that markets are generally better decision makers than governments as to where capital should flow and corporation tax cuts have significantly more impact on investment than the current ACA system.
You get a depreciation allowance on machinery anyway so for both the business and HMG it is merely a cash flow exercise, but for small firms, cash is king and they are generally lot more careful at spending it than governments and a lot better at getting the benefits of it into local economies.The government doesn't have limited resources, so that shiney new kit in the Italian factories will be at the cost of supporting other businesses.
I'm not saying that ACAs aren't helpful to some businesses, I just believe that markets are generally better decision makers than governments as to where capital should flow and corporation tax cuts have significantly more impact on investment than the current ACA system.
As I already pointed out, corp tax cuts benefit all and some of the larger firms aren't paying that much tax here anyway...
Sure, increasing a company's ACAs by a million or two isn't going to impact on HMRC, but they'd also have to increase the ACA for every company in the industry, so that million quid benefit for your company costs HMRC hundreds of millions.
Your last point is also redundant, if a company isn't paying any tax, then a tax rate cut has no impact on them.
Digga said:
Thing is, whether you're looking at industrial, construction or agricultural machinery, £250k does not buy much these days. The allowance is piffling. An all-singing-and-dancing multi-axis, large capacity CNC machine is IRO £0.5m to £1m.
The tooling alone for our new (mid-sized) machine tool will be about £20k, all in.
I hear you Digga but it really does depend on the size of the Company.The tooling alone for our new (mid-sized) machine tool will be about £20k, all in.
The current level for a company my size is way too much but on the odd year I use it I do appreciate it.....as well as the corp tax cut
youngsyr said:
Your last point is also redundant, if a company isn't paying any tax, then a tax rate cut has no impact on them.
Yes, that's a fair point in one regard, although what I meant was, through transfer pricing, they don't pay much tax in the UK, but cutting the rate will mean they pay even less.Digga said:
es, that's a fair point in one regard, although what I meant was, through transfer pricing, they don't pay much tax in the UK, but cutting the rate will mean they pay even less.
No. They declare profits in the lowest tax region. If that is the UK, they >could< actually pay more.I always thought transfer pricing was illegal
Digga said:
youngsyr said:
Your last point is also redundant, if a company isn't paying any tax, then a tax rate cut has no impact on them.
Yes, that's a fair point in one regard, although what I meant was, through transfer pricing, they don't pay much tax in the UK, but cutting the rate will mean they pay even less.HMRC is absolutely capable of altering that rate to maintain its tax take from these companies if it so wishes. The fact that it likely won't alter the rate is just a factor of why these agreements exist in the first place - the government is willing to sign tax deals with certain companies to allow them to pay less tax than the headline rate. This isn't a byproduct of the tax system, it's a policy decision.
Edited by youngsyr on Tuesday 23 August 14:58
youngsyr said:
Or, we're pointing out the elephants in the room - the weakness of sterling, interest rate and QE are not trivialities.
We haven't had any QE lately. You didn't understand my earlier post. Carney announced "facilities" for extra money to be made available. As far as I can see, none of the banks have taken him up on his bedwetter's offer.
The weakness of Sterling is superb news for British manufacturers. Recent data also suggests that it is excellent news for British retailers and the tourist industry.
Figures out a week or two ago showed that consumer spending had risen since the Brexit vote. Today's news that many Britons had decided to take their holidays in the UK, due to the weak exchange rate, told us why consumer spending had risen.
Quite simply, more of us were here. We were spending our money in the UK instead of Spain. British hotels, shops, pubs and restaurants all saw an improvement.
This is the first undisputable evidence that the Brexit victory is good for the British economy.
Undoubtedly, you will come up with some "yes, but..." reason to talk your country down.
don4l said:
We haven't had any QE lately. You didn't understand my earlier post.
Carney announced "facilities" for extra money to be made available. As far as I can see, none of the banks have taken him up on his bedwetter's offer.
The weakness of Sterling is superb news for British manufacturers. Recent data also suggests that it is excellent news for British retailers and the tourist industry.
Figures out a week or two ago showed that consumer spending had risen since the Brexit vote. Today's news that many Britons had decided to take their holidays in the UK, due to the weak exchange rate, told us why consumer spending had risen.
Quite simply, more of us were here. We were spending our money in the UK instead of Spain. British hotels, shops, pubs and restaurants all saw an improvement.
This is the first undisputable evidence that the Brexit victory is good for the British economy.
Undoubtedly, you will come up with some "yes, but..." reason to talk your country down.
It all sounds wonderful.Carney announced "facilities" for extra money to be made available. As far as I can see, none of the banks have taken him up on his bedwetter's offer.
The weakness of Sterling is superb news for British manufacturers. Recent data also suggests that it is excellent news for British retailers and the tourist industry.
Figures out a week or two ago showed that consumer spending had risen since the Brexit vote. Today's news that many Britons had decided to take their holidays in the UK, due to the weak exchange rate, told us why consumer spending had risen.
Quite simply, more of us were here. We were spending our money in the UK instead of Spain. British hotels, shops, pubs and restaurants all saw an improvement.
This is the first undisputable evidence that the Brexit victory is good for the British economy.
Undoubtedly, you will come up with some "yes, but..." reason to talk your country down.
Without sounding like I am talking the country down, What effect does it have on importers or people who enjoy holidaying abroad.
I was under the impression there are winners and losers after the Brexit victory.
don4l said:
We haven't had any QE lately. You didn't understand my earlier post.
Carney announced "facilities" for extra money to be made available. As far as I can see, none of the banks have taken him up on his bedwetter's offer.
The weakness of Sterling is superb news for British manufacturers. Recent data also suggests that it is excellent news for British retailers and the tourist industry.
Figures out a week or two ago showed that consumer spending had risen since the Brexit vote. Today's news that many Britons had decided to take their holidays in the UK, due to the weak exchange rate, told us why consumer spending had risen.
Quite simply, more of us were here. We were spending our money in the UK instead of Spain. British hotels, shops, pubs and restaurants all saw an improvement.
This is the first undisputable evidence that the Brexit victory is good for the British economy.
Undoubtedly, you will come up with some "yes, but..." reason to talk your country down.
So us being worse off is good news is it? My money won't go so far abroad, petrol will be dearer as will computers and laptops. I'm off to Italy soon and an not looking forward to the extra costs. Carney announced "facilities" for extra money to be made available. As far as I can see, none of the banks have taken him up on his bedwetter's offer.
The weakness of Sterling is superb news for British manufacturers. Recent data also suggests that it is excellent news for British retailers and the tourist industry.
Figures out a week or two ago showed that consumer spending had risen since the Brexit vote. Today's news that many Britons had decided to take their holidays in the UK, due to the weak exchange rate, told us why consumer spending had risen.
Quite simply, more of us were here. We were spending our money in the UK instead of Spain. British hotels, shops, pubs and restaurants all saw an improvement.
This is the first undisputable evidence that the Brexit victory is good for the British economy.
Undoubtedly, you will come up with some "yes, but..." reason to talk your country down.
I'm certain those companies that buy material from abroad will not be chuffed.
I'm off to the Italy next year as well, driving to Garda through France. Or was, I'll have to check prices nearer the time. At least, according to you, I know whom to blame for the drop in the value of my spending money. However:
I hate to break it to you, but there is no brexit at the moment.
I'm not talking the country down, just you.
Derek Smith said:
So us being worse off is good news is it? My money won't go so far abroad, petrol will be dearer as will computers and laptops. I'm off to Italy soon and an not looking forward to the extra costs.
I'm certain those companies that buy material from abroad will not be chuffed.
I'm off to the Italy next year as well, driving to Garda through France. Or was, I'll have to check prices nearer the time. At least, according to you, I know whom to blame for the drop in the value of my spending money. However:
I hate to break it to you, but there is no brexit at the moment.
I'm not talking the country down, just you.
Who were you blaming 3 years ago Derek, when the £/Euro rate was the same as today? Currencies go up and down, how unusual, or maybe not.I'm certain those companies that buy material from abroad will not be chuffed.
I'm off to the Italy next year as well, driving to Garda through France. Or was, I'll have to check prices nearer the time. At least, according to you, I know whom to blame for the drop in the value of my spending money. However:
I hate to break it to you, but there is no brexit at the moment.
I'm not talking the country down, just you.
Italy is the wrong country to visit for a driving holiday, period, if you are tight on a budget, it has more expensive fuel than the UK with both priced in Euro's. Make sure you have your EHIC and travel insurance up to date, as their answer to road safety is to build better hospitals.
3 years ago the cost of a litre of fuel in Italy was 1.83 Euro, it is currently at 1.44 Euro, you've never had it so good. That saving in fuel costs will pay for any loss in the £ value since the Brexit vote and then some, if you are really going to do some decent driving miles.
Ghibli said:
Without sounding like I am talking the country down, What effect does it have on importers or people who enjoy holidaying abroad.
I was under the impression there are winners and losers after the Brexit victory.
Indeed, as someone whose business is importing from the EU and enjoys holidaying there too, it's tough... I was under the impression there are winners and losers after the Brexit victory.
jsf said:
Who were you blaming 3 years ago Derek, when the £/Euro rate was the same as today? Currencies go up and down, how unusual, or maybe not.
Derek, of course, can speak for himself, but I well remember when the £/€ rate was more or less at parity in 2008/09 - I was in Corfu at the time.The difference between the sunk £ now and then, of course, is that this time it is a self-inflicted wound.
Don seems to think that a sunk £ is a good idea - but then Don has a lot of strange ideas...
jsf said:
...
3 years ago the cost of a litre of fuel in Italy was 1.83 Euro, it is currently at 1.44 Euro, you've never had it so good. That saving in fuel costs will pay for any loss in the £ value since the Brexit vote and then some, if you are really going to do some decent driving miles.
But don't you see...? It would have all been so much better if the idiots and unwashed hadn't voted as they did.3 years ago the cost of a litre of fuel in Italy was 1.83 Euro, it is currently at 1.44 Euro, you've never had it so good. That saving in fuel costs will pay for any loss in the £ value since the Brexit vote and then some, if you are really going to do some decent driving miles.
youngsyr said:
...what continues to worry me are the "macro" indicators, namely the GBP:USD exchange rate...
Of all the things to worry about, the exchange rate isn't currently one of them. In a world of almost no inflation there are far more positives than negatives from a weaker exchange rate. In any event to put the post Brexit drop into context; it fell from the 1.40's to the 1.30's and in the 08 recession it fell from 2.1 to 1.4rs1952 said:
Don seems to think that a sunk £ is a good idea - but then Don has a lot of strange ideas...
There are few benifits in having a strong pound.One of the benefits is that foreign holidays are a bit cheaper.
I've recently had a couple of weeks in Spain. Everything cost 8% more than last year. In all honesty, I didn't really notice that it was more expensive. When you are dining out at a cost of €10 per head, 8% doesn't make much difference.
We have recently heard that British resorts are having a fantastic summer because people are having their holidays here. This is a huge benefit to Britain. While these holidaymakers are here, they are spending money. The recent rise in consumer spending is a direct result of this.
People ask about the effects on importers. The good news is that importers will be badly hit. Imports are not good for an economy. It is much better to manufacture goods than to import them.
Britain suffers from a trade deficit, and a weak pound will help to rectify that problem.
PurpleMoonlight said:
don4l said:
We haven't had any QE lately.
Yes we have, straight after the base rate cut.As far as I am aware Carney announced a "facility". Nobody has used this facility, therefore there has been no QE.
Quantitive easing involves the injection of capital into the monetary system. This has not happened since 2012.
don4l said:
PurpleMoonlight said:
don4l said:
We haven't had any QE lately.
Yes we have, straight after the base rate cut.As far as I am aware Carney announced a "facility". Nobody has used this facility, therefore there has been no QE.
Quantitive easing involves the injection of capital into the monetary system. This has not happened since 2012.
http://www.bankofengland.co.uk/monetarypolicy/Docu...
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