The economic consequences of Brexit

[don4l]

Trabi601 said:

don4l said:

True.

However, we will be free to reduce tariffs on non-eu products. Sugar will get cheaper and new world wines could be as much as 35% cheaper.

If you only concentrate on the negatives, then you won't be able to see the big picture.

So, given the way sterling has tanked, the rise in prices will just be counteracted by reducing import duties. That's if there's any motivation for doing it at all. Tax money has to come from somewhere - reducing duty and cutting corporation tax has to be funded from elsewhere.

Sterling has indeed dropped against foreign currencies.

This makes British goods more competetive in the global marketplace.

What effect do you think this will have on sales?

What effect do you think that this will have on profits for British companies?

If profits go up, will the British government have the freedom to cut corporation tax?

If they cut corporation tax, are more companies likely to move here?

If more companies move here, will the corporation tax receipts increase?

If corporation tax receipts increase...

I don't think that I need to go on, do I.

Clearly, Corporation tax should be abolished completely.

It achieves nothing. As we saw in Ireland, the abolition of corporation tax is impossible while we remain in the EU.

The sooner we get out, the better.

[powerstroke]

RYH64E said:

jsf said:

Should the EU choose to not do a trade deal on car imports, that would trigger a huge increase in tax take, which would allow them to lower VAT, corporation or income tax to help counter the increased cost of living from import duties.

And who would be paying the huge increase in taxes?

perhaps anyone chosing to buy a european car instead of british , asian or north american one !!!
would we really miss most german french or italian cars ?? trucks or vans ??? It would be harder for comercails but the euro cars are very much
average compared with the japanese and even the korean stuff until its high end otherwise you would have a Kia as a company car instead of a stty audi...

[anonymous-user]

///ajd said:

That EUR50,000 BMW will not only be theoretically £45,000 instead of £35,000 due to FOREX, but also may carry a 10% £4500 tariff. That's a nearly £10k difference, that you or I may end up paying if you want one - some of which may subsidise a Qashqai. This is not reflected in any prices yet.

It would also be rather counter to the anti-protectionist free trade rhetoric being pushed. On the one hand this does suggest a softer brexit may be the aim, but on the other hand there is still the issue of the external tariff with such an option.

The only certainty is it will be complex. I also think the WTO has little choice but to say "he will try and make things simple". He is clear that the UK will need to renegotiate its position with the WTO - that much has been proven to be true as predicted. Is it really straightforward? That depends on your point of view. It could be as simple and straightforward as other trade deals.....

The WTO chief couldn't have been clearer! There will be no issue whatsoever with the UK trading under WTO rules the day we leave the EU. The last thing the world economy can afford is any doubt of that and he was plain as day that its not a problem.

Now with regards to your shiny new BMW, your maths are nonsense. When the £ was last at this rate to the Euro, was the shiny new BMW massively more expensive? Did the price drop massively when the £ strengthened against the Euro?

I'll give you a clue, it wasn't. So you can forget your massive increase in showroom price because of Forex changes between the £ and Euro. The only change worth talking about would be if there were a tariff regime in place. That can be handled if the will is there.

[Trabi601]

don4l said:

Sterling has indeed dropped against foreign currencies.

This makes British goods more competetive in the global marketplace.

What effect do you think this will have on sales?

What effect do you think that this will have on profits for British companies?

If profits go up, will the British government have the freedom to cut corporation tax?

If they cut corporation tax, are more companies likely to move here?

If more companies move here, will the corporation tax receipts increase?

If corporation tax receipts increase...

I don't think that I need to go on, do I.

Clearly, Corporation tax should be abolished completely.

It achieves nothing. As we saw in Ireland, the abolition of corporation tax is impossible while we remain in the EU.

The sooner we get out, the better.

If, maybe, might. That's all we have from the Brexiteers. Nothing which can be guaranteed.

We are a net importer - the tanking pound is making a large proportion of what we buy more expensive. There are already price increases starting to filter through in technology, our fuel prices have been very heavily influenced by sterling losses, and this has yet to be passed onto the consumer through increased cost of transporting goods. We are all getting relatively poorer.

We haven't even issued our notice yet!

I note that many Brexiteers still think we are living in the days of the Empire where we could dictate to half the world how we wanted to do business with them. We are now a relatively insignificant little island nation, with increasingly insular views through our rose tinted glasses.

Don't forget - every action has an equal and opposite reaction - if we effectively bribe companies to relocate to the UK, just watch what the EU does with import tariffs in compensation. Not that this kind of bribe actually works in the longer term anyway - here in Wales the valleys are littered with failed enterprises where an incentive was given to a company to move here, but they soon moved out to somewhere with a better incentive when our incentives ran out. (Sony and LG to name 2 such movers)

[anonymous-user]

Will be interesting to see the detail of the Nisssan deal, they will have to spill the beans.
Presumably you & I's money will be offered to all affected industries...

[Trabi601]

powerstroke said:

perhaps anyone chosing to buy a european car instead of british , asian or north american one !!!
would we really miss most german french or italian cars ?? trucks or vans ??? It would be harder for comercails but the euro cars are very much
average compared with the japanese and even the korean stuff until its high end otherwise you would have a Kia as a company car instead of a stty audi...

Let me know when any British (or even Far Eastern) manufacturer makes anything that truly compares with a 5 series.

I've done nearly 14k miles in mine since June - I can drive for 4-5 hours and get out fresh for a meeting. You're not doing that in a Hyundai. Or even a Jaguar.

[230TE]

Trabi601 said:

I note that many Brexiteers still think we are living in the days of the Empire where we could dictate to half the world how we wanted to do business with them. We are now a relatively insignificant little island nation, with increasingly insular views through our rose tinted glasses.

Not this again. Don't, aren't, bks.

[B'stard Child]

230TE said:

Trabi601 said:

I note that many Brexiteers still think we are living in the days of the Empire where we could dictate to half the world how we wanted to do business with them. We are now a relatively insignificant little island nation, with increasingly insular views through our rose tinted glasses.

Not this again. Don't, aren't, bks.

it's tiresome I'll admit but they are going to continue to scrape the bottom of the barrel because to be honest that and the other rubbish is all they have left in the toolbox

[jamoor]

Trabi601 said:

Let me know when any British (or even Far Eastern) manufacturer makes anything that truly compares with a 5 series.

I've done nearly 14k miles in mine since June - I can drive for 4-5 hours and get out fresh for a meeting. You're not doing that in a Hyundai. Or even a Jaguar.

You will in a lexis though
And maybe a Genesis

[Garvin]

PurpleMoonlight said:

Garvin said:

You've lost me on this one? The only 'tax' the UK govt would be paying (if it's even true) is the tariff on Nissan exports to the EU. The argument is that they would pay this from the income generated by the tariff imposed on imported cars from the EU. These tariffs are paid by EU industry and are nothing to do with taxes levied within UK or any massive rise in them!

http://www.dutycalculator.com/help_center/who-is-responsible-for-the-payment-of-import-duty-and-taxes/

Ultimately end consumer pays the tax.

Yes, I undearstand that the increased cost may (but only may) get passed onto the customer but a) that is an indirect tax on which the customer has choice - we are not all forced to pay it; b) it ignores market forces where the price is set against competitors; and c) it give a distinct advantage to those vehicles produced in UK - did somebody mention Nissan earlier on?

So some may not like paying the increased price for their German luxobarge - well tough tittie, it is a personal choice whether they do or not. Nobody, but nobody, absolutely has to pay this increased 'tax'!

[s2art]

Trabi601 said:

I've done nearly 14k miles in mine since June - I can drive for 4-5 hours and get out fresh for a meeting. You're not doing that in a Hyundai. Or even a Jaguar.

Top Gear disagrees;

http://www.topgear.com/car-news/review/showdown-ja...

[Jockman]

RYH64E said:

Jockman said:

All eligible for ER at 10% in your exit strategy (be wary of excessive surplus cash if this is your plan).

It's plan A, providing the rules don't change.

Just be mindful of the 20% 'rule'. Cash at Bank as a % of total assets >can< be frowned upon by HMRC in certain circumstances for ER.

Talk to your Accountant.

https://www.taxation.co.uk/Articles/2014/11/18/332...

[Jockman]

Trabi601 said:

I've done nearly 14k miles in mine since June - I can drive for 4-5 hours and get out fresh for a meeting. You're not doing that in a Hyundai. Or even a Jaguar.

Not true Trabi. You will stink, like the rest of us.

What, with your delicate back etc.....

[Trabi601]

jamoor said:

You will in a lexis though
And maybe a Genesis

No and no. Neither of them make anything that's remotely comparable. Their diesel engines are a decade behind the Europeans and HSD is just weird - CVT has no place in a large executive car.

[Jockman]

loafer123 said:

I do not get why you think the WTO issue is complex.

We simply will become members of the WTO like the US or China, instead of having the EU acting as our agent.

When you made this a big issue before, saying the UK wasn't a member, I simply went onto their website and the position was instantly clear.

I >think< the consternation was over people's belief that we were already Members in our own right.

[Garvin]

jamoor said:

Garvin said:

You've lost me on this one? The only 'tax' the UK govt would be paying (if it's even true) is the tariff on Nissan exports to the EU. The argument is that they would pay this from the income generated by the tariff imposed on imported cars from the EU. These tariffs are paid by EU industry and are nothing to do with taxes levied within UK or any massive rise in them!

Am I understanding that the taxpayers will subsidise nissans operations here? Or am I mistaken?

If it is true then, yes, the UK taxpayers will be subsidising Nissan but not at any increased cost to the UK taxpayer - the UK taxpayer will just not see the benefit from all the tariffs on imported vehicles. However, this needs to be offeset against the UK taxpayer having to fund ~ 7000 more unemployed if Nissan shut up shop in UK and moved abroad not to mention loss of corporation tax on Nissan operations and its supply chain.

[Jockman]

Not sure if it has been said before but a big THANK YOU to yet another female Conservative leader from the hard working people of Sunderland.

What with all that Labour has done for them over the years.

[Jockman]

Garvin said:

If it is true then, yes, the UK taxpayers will be subsidising Nissan but not at any increased cost to the UK taxpayer - the UK taxpayer will just not see the benefit from all the tariffs on imported vehicles. However, this needs to be offeset against the UK taxpayer having to fund ~ 7000 more unemployed if Nissan shut up shop in UK and moved abroad not to mention loss of corporation tax on Nissan operations and its supply chain.

Plus the income tax & NI.

Plus the supply chain income tax & NI.

Plus any VAT implications.

Do cars still have a first reg tax (or something like that) too?

[Garvin]

RYH64E said:

Garvin said:

You've lost me on this one? The only 'tax' the UK govt would be paying (if it's even true) is the tariff on Nissan exports to the EU. The argument is that they would pay this from the income generated by the tariff imposed on imported cars from the EU. These tariffs are paid by EU industry and are nothing to do with taxes levied within UK or any massive rise in them!

Tariffs on imported goods are paid by the importer not the exporter, so BMW UK would pay import duties on anything manufactured at their EU plants to HMRC, thereby increasing their costs, resulting in higher prices for UK customers. EU industry would not be paying, the UK consumers would.

Any subsidies paid to Nissan would be to enable them to lower their selling prices to EU customers so that they remained competitive with EU based manufacturers.

Edited by RYH64E on Thursday 27th October 18:47

Yes, yes, UK consumers would be paying higher prices but only if they elect to. They have choice so it is not a tax that absolutely increases the tax burden on the UK consumer. See my earlier post.

[B'stard Child]

Jockman said:

Do cars still have a first reg tax (or something like that) too?

a question like that on a motoring forum tsk!!!