Brexit vote shows little effect on the rate of domestic start-ups.

This is a subject which in the past year has become synonyms with UK politics, economics and sociology. The Brexit vote has had a profound effect on these aspects, but here we’re particularly keen on the supposed effect this has had on the UK company formations volume.

Prospective business owners from outside the UK numerously contact us and ask what implications are involved in forming a company and if what they need to be aware of at this current point. This is fully understandable, however as of now there has been categorically no impact on the company formation industry. We’re keen to echo and communicate that prospective private limited company owners should not feel deterred about the opening up their company here.

Here, we’ve researched that in the 11 proceeding months following the Brexit vote, circa 580,000 new companies were formed in the UK which is actually an increase of 6% volume from equivalent period during 2014-2015.

There was a slight drop however from the equivalent period during 2015-2016 (the months leading up to the Brexit vote) however, there is no credible evidence of this minor change of figures being a correlation with last years vote. From various sources viewed and analysed, this indicates that the Brexit vote has yet to make a sufficient dent in business start-up activity.

When addressing and evaluating all the information researched; it is important to factor in perspective that there are more than likely other variables impacting these figures. There could be long standing or new examples that affect this volume in their own way; with cases being various financial and tax implications that will deter a segment of prospective business owners.

It cannot be ignored that considering firm negotiations haven’t started yet so there is still a couple of years for the UK to negotiate a strong deal (and thus all of us knowing about impact this will have in all aspects of UK society). This of course includes net company formation volumes. The result of leaving the EU, such as all the changes to laws that were once determined by the EU, will take a number of years to come to fruition.

To reiterate material mentioned in earlier blogs posted by us; we cannot definitively advise on specific Brexit related queries, however this will become clearer as we become more aware of changes to UK legislation.

Evidence has shown that uncertainly surrounding the Brexit vote hasn’t significantly affected company formation volume, it is far too early to claim that in the following few years there will be a substantial negative, or even positive affect on this volume.

Categorised in: Business Planning, Uncategorised

This post was written by Chris Beck