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Brexit and the firm in the UK

Brexit and the firm in the UK

For more than six months now, Polish residents of the UK who have set up their own businesses are wondering if anything will change for them in terms of Brexit? If they will be faced with double tax fees for both countries?

Why have Polish people been so eager to start their own businesses in the UK for the last couple of years? The answer is simple. Primarily because of the high tax free amount, (which in the period of 15 years has been raised 13 times), more beneficial regulations as well as laws guaranteeing greater freedom of running a business than in Poland. In comparison, in 2016 in the UK, the tax-free rate has been agreed at £11 thousand pounds , in 2017 , the residents  will be faced with a rise to £11,500.00  ( around 64,7 thousands of zloty). Hence the tax free amount will be 20 times higher than in Poland. Additionally, the tax thresholds are changing. A tax system constructed in this way will save thousand small firms in Great Britain from paying income taxes. This is the best explanation for the rising number of entrepreneurs from Poland choosing the UK as a place to run their businesses.

Information regarding the number of businesses in UK being started by residents with Polish passports are not clear. According to The British-Polish Chamber of Commerce, there are around 40 thousands of such businesses, meanwhile in 2014 Export Britain, referring to the data from The Centre for Entrepreneurs said that there are 22 thousand businesses set up by Polish people living in the UK and an additional 65 thousand are self-employed. A sum of nearly 90 thousand enterpreneurs belonging to Polish people, gives us sixth place amongst the various nationalities living in the UK. Therefore, according to the data, 1 in 10 polish people living in the UK runs some sort of business. However, we have to be aware of the fact that not all polish businesses belong solely to Polish people living in the UK. It is estimated that around 30% of these businesses have been set up in the UK for optimization purposes. Although there aren’t any official statistics on the scale of removals, according to estimates they equal to thousands each year.

Can Brexit threaten the finances of Polish businesses in any way? Currently there are no information about this. The procedure of leaving the European Union is a long and complicated process itself , it can even last two years or longer. A major part of this process are surely talks and negotiations about the conditions of cooperation between Great Britain and Europe. It is certain that both sides will want to develop the most beneficial relations for economic and commercial purposes – says Anna Matelska from AM INTERNATIONAL SOLICITORS.

Reading various opinions of specialists, as well as politicians, they mention the eventuality of economic cooperation based on solutions adapted by Switzerland and Norway. It is a number of mutual contracts and regulations. If it got to this, they would have to be constructed in terms of relations with Great Britain. There is an existing risk, that certain restrictions will appear – for which nobody is able to answer for at the moment. Hence it is a problem for the future. From what I know, experts are advising to keep calm and to wait and see how this situation develops – explains solicitor Anna Matelska. We have to remember that despite many financial amenities for businesses, big amounts of money are flowing into the UK budget from taxes, which are paid by entrepreneurs. It is of course beneficial for the British government and there is a small probability, that they may want to give this up, therefore creating contracts with the European Union, which would discourage people from setting up businesses in the UK.

Centre for Entrepreneurs indicates that 464.527 businesses in the UK have been set up by entrepreneurs with foreign passports. This makes up 14% of all businesses, therefore 1 in 7 businesses in Great Britain, belongs to an immigrant. Immigrants are also more enterprising than the British as 17.2% of them runs their own business.

The amount of British people running their own businesses is only 10.4%. In the UK there are currently no restrictions for people of various nationalities to open their own businesses. This also concerns people from outside the EU.

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