Export news in brief: Brexit, Europe, corporation tax, tax

 Brexit, Europe, corporation tax, tax
Brexit, Europe, corporation tax, tax

Investors should make preparations for their portfolios in the run-up to the referendum

Investors should consider ‘Brexit-proofing’ their portfolios. This is the warning from financial advisory firm deVere Group’s CEO and founder Nigel Green who is speaking out as it is reported that British banks and the Bank of England are busy preparing contingency plans in the event of Britain leaving the EU following the referendum on 23 June.

He comments: “The historic vote in June is currently looking incredibly close. As such, investors should now be considering how they can Brexit-proof their portfolio to mitigate the effects of a fall in the value of UK assets should the Leave campaign triumph on June 23.

“We have seen that the referendum and the consequent campaigning has already created considerable uncertainty, with many companies in the private sector shelving or postponing investment due to the forthcoming vote. This uncertainty and volatility can be expected to intensify if Britain decides to leaves the EU.”

UK has one of the lowest corporation tax rates

Companies in the UK are enjoying one of the lowest corporation tax rates (accounting for just a fifth of their profits) of the major global economies.

These are the findings from a new study by UHY Hacker Young, the national accountancy group, which reported that the UK’s headline corporation tax rate was 21% on taxable profits of USD 1,000,000 for the financial year ending 2015. Of the major global economies, only Russia has a lower rate, at 20%.

This is far lower than the global average corporation tax rate of 27%. For European economies the average is 25.3% and the G7 average is even higher at 32.3%.

UHY Hacker Young explains that low corporation taxes can help countries create competitive advantage and fuel growth by freeing up more profits for re-investment, discouraging domestic companies from moving investment overseas and attracting foreign companies to locate there.