Impact of the UK Election result on Making Tax Digital, the economy and Brexit.

Impact of the UK Election result on Making Tax Digital, the economy and Brexit.

When speaking to people eight weeks ago it seemed almost impossible that anything other than a significant Conservative win would be the result of the General Election. But I guess Harold Wilson was right when he said “A week’s a long time in politics” and now there is a hung parliament what does that mean for micro, small and medium sized business owners?

Making Tax Digital

I think this is going to be something left in the “in tray” of, Chancellor, Philip Hammond. It’s almost certain to be introduced at some point but I think it’s likely to be postponed whilst other more pressing matters are covered off. Business owners should still be planning for this as I don’t think the postponement will be for long, with the best planning focusing on introducing digital accounting systems. Systems like XERO will help deal with the obligations of Making Tax Digital but also give the opportunity to build efficiencies into systems and procedures.

Economic uncertainty

Brexit and a weak supply and confidence agreement with the DUP mean that further shocks in the economy are likely. How these issues effect the pound, consumer confidence, inflation and growth in the economy is unknown but with a “weak and wobbly government there is sure to be some uncertainty. Whilst it’s a cliche that business hates uncertainty the wheels in the economy will continue to turn. As business owners we need to remain prepared to act if “shocks” effect our business. I wouldn’t advocate preparing 18 month plus plans but keeping a focus on the now and immediate future, watching key measures of performance for your business and monitoring cash.

Brexit

Key questions around Brexit remain unanswered and the muddled political picture is not likely to help negotiations. I think it unlikely that the DUP effect will significantly influence the stance on the key issues however, I do think that there may be a softening in approach to try and align it with public opinion. I don’t think there is much we can do to protect against the negative effects of Brexit because we don’t know there will be any yet. For me focus should be on business as normal with close monitoring of performance and cash.

So whilst the result of the election might seem a disaster I’d not focus on the macro uk view. Instead I’d be focusing on good business disciplines; monitoring performance, controlling cash flows and keeping abreast of changes in the external environment that might impact on the business.

Richard Hallsworth Lincoln Accountant and Business Adviser LinkedIn