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European Businesses Anticipating Brexit Fallout

by Jason Gorringe, Tax-News.com, London

06 January 2017


More than half of European businesses view Brexit as a threat to their operations, according to a study from accountancy firm RSM.

54 percent of the 700 European business leaders surveyed believe the UK's vote to leave the EU poses a threat, compared with 39 percent who see it as an opportunity. 41 percent believe that the UK will become a less attractive destination for investment.

The report said that access to the Single Market is the number one priority for European firms with operations in the UK, followed by tax incentives and free movement of labor.

European businesses are most concerned about increases to their cost base, the report says. Of those European businesses who will be affected by the vote to leave the EU, 58 percent expect the cost of doing business to rise and 50 percent expect the decision to hit their bottom line. 42 percent of these business expect Brexit to have a negative impact on their suppliers in future years.

Meanwhile, 25 percent of respondents who intended to invest in the UK reported that the decision is now under review.

"The UK's decision to leave the EU is not just a challenge for British businesses but for companies across Europe, uncertain about what Brexit means for their international ambitions. It is vital, in this period of uncertainty, that businesses focus and prepare for the future based on the emerging facts and are not paralyzed by the countless doomsday theories out there," said Anand Selvarajan, Regional Leader for Europe, RSM International. "Trade will continue and businesses need to be agile in responding to the evolving political and economic landscape."

TAGS: tax | business | value added tax (VAT) | tax incentives | export duty | import duty | European Union (EU) | Europe

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