On June 23rd 2016, the UK voted to leave the European Union, and here at Ellis & Co we have been busy fielding questions from clients in the aftermath of the vote.
The UK joined the EU – then known as the Common Market – on January 1st 1973, with Ireland and Denmark electing to join at the same time, taking the six existing members up to nine. The EU now comprises 28 members, while a further five candidate countries have expressed their desire to join. But, last month, a majority of over one million people in the UK voted in favour to leave, and what’s being dubbed the "most complicated divorce in history" is about to begin.
First and foremost, following the resignation of David Cameron, new prime minister Theresa May has now taken up her position in Downing Street and will be negotiating Britain's exit from the EU. Cameron had said that the new leader should decide when to invoke Article 50 - the formal process giving two years' notice of the UK’s intention to quit the EU. Many European leaders have expressed their desire to see Brexit happen quickly, fearing that an amicable, drawn-out settlement would simply encourage other countries to seek their own version of Brexit.
Immediately upon voting to leave the UK, both the pound and FTSE Futures (trading in the Far East) fell sharply. The UK’s credit rating was one of the first casualties of the vote, with credit ratings agency Moody's cutting the outlook for the UK’s credit rating to negative, saying that the result would herald "a prolonged period of uncertainty." At this stage, it’s impossible to say what impact the vote will have on the UK’s relationship with Europe, however many Leave campaigners have been at pains to stress the UK's links with Europe: the more rational European leaders will not risk losing such a big market, especially as Europe moves slowly out of a recession.
Speaking about the result, Robert Ellis, Principal at Ellis & Co chartered accountants and business advisors, said: “The number one thing businesses need is certainty but this may take time due to the recent change of leadership in Downing Street. Nothing is going to change overnight – we may well continue to be a member of the EU for as much as two years. There will also be opportunities. The fall in the value of the pound has already had benefits for a number of Ellis & Co clients who actively trade across the EU with an increase in orders.”
We appreciate that our clients may have concerns and questions, so please don’t hesitate to contact Robert Ellis at Ellis & Co to discuss how Brexit may affect your business. We have also compiled a full report following the victory for Leave in an attempt to give you an overview of how things stand currently. The report can be accessed here.
Source: Clients First