A new survey has suggested that UK has become a less attractive place to do business as a result of the Brexit vote. Professional services firm KPMG questioned 100 of the largest UK listed companies and foreign owned subsidiaries, as well as 60 companies from across the other G7 nations, and found that respondents deemed the UK less attractive than they did this time last year in terms of both tax competitiveness and appeal as a destination for foreign direct investment, reported The Independent.
"As in 2015, the Irish tax regime tops the rankings with 74 per cent of UK companies selecting it as one of their 'top three' and the UK again taking second place," KPMG wrote in the accompanying report. "What is noticeable however, is the widening gap between Ireland and the UK which was just 1 per cent in 2015 but has grown to 9 per cent in the past year," they said. The survey showed that amongst the 60 non-UK companies surveyed this year, the UK fell from first to fifth place in the rankings, trailing Ireland, Luxembourg, the Netherlands and Singapore.
"Not only does this demonstrate a sharp decline in perceptions of the UK's tax regime, there also seems to be a clear divide in sentiment between UK versus non-UK businesses," KPMG said.
Asked why their perception of the UK had changed, non-domestic businesses mostly cited the prospect of sensitivity to disruptions in trade deals and tariffs as a result of Brexit, and an end to the UK's access to the single market. One concern was also the risk to the mobility of skilled labour.
The survey that was conducted between December 2016 and February 2017 and 56 per cent of the companies interviewed had a turnover of over £1bn, according to KPMG. A total of 22 of the companies interviewed were members of the FTSE 100 bluechip index, with another 21 in the FTSE 250.
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Brexit raises investment questions
29 years old Priya Narayan has lived in many cities around the world. She was brought up in Malaysia, where she was educated at an international school, Priya moved to Wales with her parents when she was 11 and stayed there until she moved to Oxford to study when she was 23. She has been in London for the past few years. Interviewd by The Times, the Risk Manager for HSBC has recently bought her first home at Dockside in Canary Wharf with £420,000. Her parents assisted her with £50,000 deposit, that helped her to get on the property ladder. She had previously rented in flatshares across Docklands.
She loves living in the area, near the water, close to the DLR and other transports and feels safe living in the island. Her office is 10 mins walk from her home.
Priya who earns £50,000 a year is becoming increasingly concerned about the impact of Brexit on her investment and would like to know how leaving EU will affect London Property market. She told The Times “Although I am pleased becoming a homeowner, I am concerned about how Brexit will impact real estate in London, and the kind of market we'll face in a few years' time. I am wonderinf whether my property is a sound investment.”
Priya also wants to know how much of the 40% government loan under Help to Buy scheme as a first time buyer- she should repay during the five year interst-fee period, or whether she would be better off using her savings to repay more of her mortgage. Her decision will be influenced by the property prices, because if they were to drop then the total amount of government loan would get smaller, in line with the flat's value. She would also like to have the flexibility of moving in the future, this may not be her permanent home in the future. She would like to know what will happen to her loan if she sells during the five year interest free period. There are many international opportunities at HSBC, she told The Times.
“I'm hoping I've made the right choices.”
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