Politicians Try Mending Relationship With Business

Politicians in the United Kingdom have moved to rebuild their relationship with the business community by hiring Sky executive Andrew Griffiths, as part of Number 10 team.

A source close to Griffiths said Johnson’s appointment of the Sky veteran – who most recently served as the broadcasting giant’s chief operating officer – was “a clear sign of intent” that the former mayor of London wants to build fresh links with the City and businesses across the United Kingdom.

However, the relationship may already be thawing with most business groups giving a cautious welcome to the incoming resident of Number 10 yesterday.

The British Chamber of Commerce was also quick to send its regards, but again warned about the consequences of crashing out of the bloc.

The message to Boris Johnson from business communities around the United Kingdom couldn’t be simpler: the time for campaigning is over — and we need you to get down to business.

Companies need to know, in concrete terms, what your government will do to avoid a messy, disorderly Brexit on 31 October – which would bring pain to communities across the United Kingdom and disruption to our trade around the world.

Business lobby group the CBI echoed other calls for a pro-business Brexit deal, but also on support for infrastructure projects to boost businesses across the country.

Johnson has previously voiced opposition two of the country’s most ambitious infrastructure projects: Heathrow airport expansion and the HS2 rail project.

The pound dropped to $1.247, after the membership ballot result naming Johnson as leader was announced.

As Michael Brown, senior analyst at Caxton FX explains, this was largely due to the fact that the likelihood of Johnson victory had already been priced in.

In the run-up to the announcement a number of businesses had been nervous about the prospect of a Johnson premiership, due to the former London mayor’s insistence that he would take the United Kingdom out of the European Union with or without a deal by the 31 October.

No-Deal Brexit Vote Boosts Pound Sterling

Pound sterling exchange rates remain under pressure with Brexit uncertainty continuing to loom large. However, against the United States Dollar, Sterling found something of a reprieve yesterday after disappointing house building statistics were published across the Atlantic.

With Theresa May now in her last week of office, concern over the potential for political chaos under her successor is likely to keep a lid on any upside for the Pound.

The Australian Dollar also performed notably well overnight, gaining ground over Sterling after Australian employment data suggested the Reserve Bank of Australia may have done enough for now in terms of interest rate cuts.

The Pound has continued to climb against the Euro and United States Dollar in Thursday’s trading session. MPs backed an amendment that could prevent Conservative Party frontrunner Boris Johnson from shutting down Parliament to pass a no-deal Brexit in October.

Housing Data Offers Cable Some Temporary Respite

The British Pound to United States Dollar exchange rate found a little respite yesterday following the release of some significantly worse-than-expected United States Building Permits data. Despite falling mortgage rates across the Atlantic, applications to build new houses fell for a second straight month to the lowest level in two years.

Land and labour shortages are said to be behind the move, so this may prove sufficient deflect some concern away from the reading which has previously been seen as an indicator of recession.

However, the news was sufficient to help drag Cable back from its test of two-year lows, at least for now.

Political Uncertainty Keeps Pound Exchange Rate in Check

Markets may have priced in Brexit uncertainty, but it seems as if the impending political chaos starting next week, once a new Conservative Party leader is announced and new Prime Minister appointed, may still need to be priced in. Parliament is, however, strengthening its resolve to ensure it cannot be suspended to allow a no-deal Brexit to be forced through.

The House of Lords voted yesterday to provide further safeguards here and the bill will return to the House of Commons today for a second reading.

The Pound to Euro exchange rate remains close to six-week lows, but anything that points towards another general election being necessary in the Autumn has the scope to see further selling here.

Why Did it Move? Pound to Australian Dollar Exchange Rate

The Pound to Australian Dollar exchange rate fell last night despite a decidedly mixed employment report from Canberra.

However, upward revisions to May’s data and solid growth in terms of full-time jobs appear to have been sufficient to convince markets that the Reserve Bank of Australia doesn’t need to jump in with another rate cut just yet.

Having traded as high as 1.7760 yesterday, the cross now sits almost a cent lower at 1.7670.

Stay tuned for updates!

Why Your Small Business is Struggling to Expand

Small business is defined as a privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business.

More than seven in 10 firms in a survey by the FSB said they did not expect to raise capital spending in the next quarter, the highest figure in two years.

The FSB says the current standstill over Britain’s path to Brexit has left small firms “hamstrung” and struggling to expand, hire and increase productivity.

Brexit is the withdrawal of the UK from the EU. The United Kingdom is the only sovereign country to have left the European Union. The United Kingdom has been a member state of the union and its predecessor the European Communities since 1 January 1973.

The FSB survey also suggests growing caution among lenders as signs stack up of a slowdown in the United Kingdom economy.

More than four in 10 of its member firms said new credit was “unaffordable,” the highest in more than four years.

Lending to consumers also increased at its smallest annual rate in more than five years in May, according to separate data from the Bank of England.

In the manufacturing sector, a key index of United Kingdom performance slid to a six-year low on Monday, as a survey highlighted sinking output and employment levels.

He also took aim at Conservative leadership rivals Boris Johnson and Jeremy Hunt, who have talked up their willingness to lead Britain out of the European Union without a deal.

When Should You Expand Your Business?

Global expansion is when a fast-growing business takes its operations into lucrative overseas markets. These businesses are looking to reach the next level of growth and they can do this by establishing a presence in new countries across the globe.

Expanding your business Internationally is a monumental task but, if done right, can be a significant driver of growth.

We are proud to say that we now have coverage in 190 countries, with a small team and no outside funding.

Invest in a scalable infrastructure

Build a platform that is designed to scale from day one.

For example, we made sure that Advisory Excellence was set up with infrastructure where it was easy to add new countries, and track KPIs globally.

A focus on marketing channels that can scale, such as Google, YouTube, Pinterest and LinkedIn, can also prove useful in building a strong foundation for future growth. Whatever your budget, these platforms allow you to test the waters as knowledge of your market increases.

As campaign metrics demonstrate positive growth, your company can expand budgets to grow reach Internationally.

Think globally, act globally

Being in hypergrowth mode is exhilarating but there are plenty of opportunities to learn from mistakes. When you scale very quickly, there is no time to micromanage locally.

Only tailor locally what has been proven to make a significant impact.

Build a small but mighty team

Crafting a small but mighty team is key to moving forward in a positive direction.

Even if there are only a small number of individuals, a dynamic team can move mountains when the focus is right.

Create a high passion and energetic team which is invested in the future of the business.

If you instil one motto in your team, it should be: fail fast, learn and improve. We love trying new ideas and encourage the whole team to continuously test, especially when it’s outside their comfort zone.

The only requirement we set is to approach it methodically, to document the results and to share learnings with the team.

Stay community-focused

Nurture your brand ambassadors; your first and most loyal members or customers will be your strongest voices if they can be involved. We’ve been around since 2013 and have built a community that continuously stays engaged.

Listen to your members or customers, speak with them every week and make changes based on your insights. As a result of listening to our members, we decided to start hosting events.

There is nothing stronger than a real-life experience and it really makes us stand out from the crowd in a competitive market.

Getting more feedback from your audience can push your business to new heights. We collaborate with our members, so a lot of our content is member-generated.

Work smart

Automate time-consuming tasks.

We believe we have a strong proposition for individuals around the world and expanding into new markets has been one of the most rewarding things we have done.

Small Businesses Ask What Next?

Small business is defined as a privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business.

Speaking after today’s vote on the Withdrawal Agreement, National Chairman of the Federation of Small Businesses Mike Cherry said: “On the day that we were supposed to be leaving the European Union, all we have is yet another political failure to chalk up.”

Withdrawal agreement means an agreement between the United Kingdom and the European Union under Article 50 of the Treaty on European Union which sets out the arrangements for the United Kingdom’s withdrawal from the European Union.

“Responsibility for this deepening political crisis lies squarely at the feet of politicians who have clearly stopped listening to the business community.

Our small businesses have been crying out about the significant damage that uncertainty is causing them. These cries have been drowned out by those seeking to play political games.”

Planning has stalled, investment is handcuffed and growth has flatlined. The only question now is what happens next?”

Mike is the National Chairman of the Federation of Small Businesses.

An active FSB member for over 20 years, he is committed to getting the voice of small firms heard at the highest level.

Previous to his current role, Mike led FSB’s campaigning and policy work for nearly a decade as National Policy Director. He remains a strong advocate of employability and enterprise, both in the UK and across the globe.

For more than 40 years Mike has worked in the timber and manufacturing industry and continues to do so today.

Mike Cherry’s successful family business, W.H. Mason & Son Ltd, supplies cask closures for the brewing industry and laser engraved promotional and giftware products for B2B, specialist retail outlets and visitor attractions.

Potential impact of Brexit on the law firm market

With Brexit negotiations continuing in the United Kingdom (UK), there is little clarity as of yet on how businesses will be able to operate both in mainland Europe and cross border once the UK leaves the European Union (EU) in March 2019.

As a regulated profession, law firms potentially face greater uncertainty — the regulations directed by each individual bar association must be carefully considered in conjunction with any agreement reached between the UK and the EU.

What’s happening at present in law firms with UK offices?

Brexit remains high on law firms’ agendas, particularly with respect to the uncertainty surrounding firms being able to provide legal services as normal after March 2019. Conversations around restructuring have been brought to the forefront.

Many law firms, UK-headquartered firms in particular, are approaching their final accounting period of trading before the two year Article 50 process expires in March 2019. For some businesses, it is therefore impractical to wait to see how Brexit negotiations progress and how local countries’ bar associations respond. Any action is likely to take a period of time and require HMRC (and potentially other) clearance or clarification.

What should your law firms be doing?

Each business will need to consider its current legal structure, the tax and regulatory rules (including around management, control and profit sharing) in the locations in which it operates, and the profitability of the local offices.

Some firms will wish to restructure, and those most likely to consider restructuring may have:

  • EU operations held within a UK incorporated entity (i.e. an EU branch of UK LLP);
  • EU operations held within a non-UK incorporated entity (i.e. an EU branch of US LLP); and/or,
  • EU incorporated entities with UK solicitors having a level of management and control.

Despite Brexit primarily affecting UK businesses, it is important to note the impact that this may have on US-headquartered law firms. As a result of current regulations, US-headquartered law firms usually operate as a UK LLP, or a branch of the US LLP depending on the EU country in question. However, a by-product of Brexit could see the harmonization of regulation across EU territories so it is possible that neither of these structures will be permissible post-March 2019.

While not certain, to the extent that any grandfathering provisions are introduced there may be benefits in a firm being established in the appropriate country(ies) in the appropriate form before March 2019.

It should be noted that it is possible that a firm may wish to restructure twice: the first time to satisfy the applicable regulations during an interim period to ensure continuity of operations, and once again after a final agreement has been ratified to give a more permanent solution. As we approach the March 2019 deadline there is likely to be an increasing need to have plans in place to manage the uncertainty and satisfy stakeholders.

Potential tax consequences of restructuring?

PwC UK has noted that firms currently considering restructuring their EU operations may consider transferring their EU book of business into a separate EU legal entity. This could involve a demerger of a business within a UK LLP, which poses a number of UK tax considerations, including:

  • whether there has been a cessation of trade in the UK LLP;
  • for UK income tax purposes, whether this could trigger the closing year and opening year rules of taxation to apply to the equity partners (basis period adjustments). Quantification of overlap profits would be required to understand the funding requirements;
  • a UK capital gains tax event could arise on the equity partners upon transfer of partnership assets to a new legal entity;
  • there may be non-UK income tax consequences, for example if an EU office has to move to an accruals basis of accounting; and/or
  • overseas capital gains tax events may also crystallise on the equity partners.

It is clear that restructuring, if necessary, could result in both “dry” tax charges and an acceleration of tax, which may provide challenges around funding for both the firm and the individual partners.