Conservative Party wins UK General Election with considerable majority
The UK went to the polls on December 12th, and with the result being a resounding win for Boris Johnson, the Conservative Party will now form a government in the UK, winning with the biggest majority since 1987.
What does this mean for the UK and Brexit?
The next Brexit deadline is 31st January 2020, having missed previous target dates of March and October 2019. With a majority in the House of Commons, the Conservative Party can now implement its policies without needing to rely on support from other parties to get them passed. Prime Minister Boris Johnson said the result had “smashed the roadblock” over Brexit, stating “We will get Brexit done on time by 31st January, no ifs, no buts, not maybe”.
There is a level of complexity over Brexit however which should not be underestimated, notably the negotiating of a new trade deal with the EU before the expiry of the transition period. There are only 11 months for the Conservative Party to do this, as they have pledged in their manifesto that they will not extend the implementation period beyond December 2020. Watch this space.
What does a Conservative government mean for the financial sector?
With small and medium sized businesses making up the backbone of the UK economy, there was significant interest in the run up to the election in both the Conservative and Labour parties’ approach to the treatment of tax and private corporations.
The future of Corporate Tax reliefs for example was a hot political topic, with both the Conservative Party and Labour pledging changes to the existing tax regime in their election manifestos.
While the future around the UK’s tax system is arguably less fundamental under a Conservative government than it would have been under Jeremy Corbyn’s Labour Party, there will undoubtedly be significant review, reform and changes ahead.
What reform actually means will be revealed in the next Budget, due to take place at some point in February 2020. Any changes are likely to be implemented at the start of the new UK tax year on 6th April 2020.
Whilst there is speculation around what any potential changes could be, there is a feeling amongst the UK investment community that bringing any planned transactions forward for conclusion under the current tax regime may be a prudent step to take.
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