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Snapchat Chooses The UK For International HQ

Snap, the American company that owns popular messaging app Snapchat, has established its international headquarters in London, where it will book all non-US ad sales, in what some analysts note as a vote of confidence for the post-Brexit United Kingdom.

The decision to open an international hub in the UK by the California-based startup sets it apart from its peers in Silicon Valley. Top American technology companies like Apple, Facebook, Google, Microsoft, Uber, Twitter and several others have chosen Ireland, Luxembourg or the Netherlands as their international HQs to shelter their earnings from US tax laws, taking advantage of lower tax rates in these European countries.

United Kingdom’s corporation tax rates is also one of the lowest in the world, but plans to reduce it even further have made the country an attractive option for many companies with international operations.

Snap Group Limited, which is the company’s new UK entity, will be booking all revenues from customers in the UK and in all countries where it has no local office.

The company’s newly-minted international HQ will be stationed near its existing Soho office in London, which was established back in 2015. It currently has 75 people on staff, but will hire additional workers, including engineers.

“The UK is where our advertising clients are, where more than 10 million daily Snapchatters are, and where we’ve already begun to hire talent,” said Claire Valoti, general manager of Snap Group in the UK.

Snapchat’s move to establish a headquarters in Britain comes amid criticism of American companies’ practice of avoiding US taxation by setting up shop outside the US even though most its operations are inside the US.

Google chairman Eric Schmidt defended the industry’s much-criticised tax avoidance tactic, saying they do it “based on the incentives that the governments offered us to operate.”

The company is set to go public as early as March this year, with an estimated valuation of $25 billion.

If you are looking for expert Part Time FD Services in the Leeds & Yorkshire area contact Assured FD Services today.

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Potential Loss of Mutual Enforcement Rules Puts UK’s Legal Sector at Risk

UK’s legal sector, a £25.7 billion industry, could be at risk if the Government is unable to secure guarantees for it after the country leaves the European Union (EU), lobby group TheCityUK warned on Tuesday.

Britain’s legal services sector is preferred by international companies for dispute resolution due to the use of English law in commercial contracts.

EU rules require member states to recognise and enforce UK’s law and vice versa.

This makes Britain a very attractive place to draw up contracts and resolve disputes for many businesses, both local and international. It has become one of the largest legal sectors in the world with four times more turnover than France and two and half times more than Germany. It is second only to the United States.

The potential loss of mutual enforcement rules, which is a likely consequence of the Brexit, could force many companies to look elsewhere for legal services.

The sector, which employs roughly 370,000 people, is now urging the Government to find a solution that will allow mutual enforcement of laws and judgments to continue. It is likewise calling on lawmakers to adopt measures to ensure free movement for legal professionals in the European market, noting the high number of foreign law firms operating in the country.

The group pointed out the adverse effects to other key sectors including financial services, energy, real estate and technology if legal support services are disrupted.

Miles Celic, chief executive of TheCityUK, said it is vital that the key challenges and opportunities for the legal sector are addressed during the Brexit negotiations, and that its competitiveness is not only maintained but enhanced.

The legal services sector added £25.7 billion to the country’s economy last year, comprising 1.6% of UK’s gross domestic product (GDP).

If you are unsure about your business’s financial future then please get in touch. At Assured FD Services we have over 20 years expertise working as a full and part time FD for companies across the UK.

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Financial Services Sector Is UK’s Top Tax Payer

The United Kingdom’s (UK) financial services sector paid £71.4 billion in tax last year, accounting for 11.5% of the UK’s total tax collection. This year’s contribution was the highest since 2007, accounting firm PwC noted in its annual report.

Banking institutions and insurance companies were the top contributing sub-sectors, paying an additional £8.4 billion and £3.4 billion respectively, thanks to reforms in corporate tax and the bank levy.

The report, which was commissioned by the City of London, underscores the potential adverse impact to public finances if Brexit limits UK’s access to the European Union’s (EU) single market.

Financial services firms in the UK have expressed concerns about the Brexit’s negative effect on their businesses. Main concerns include losing access to a skilled EU workforce and potential restriction on their ability to trade with the single market, among others.

About 1.1 million people are employed by the financial services sector in the UK, comprising 3.4% of the country’s total workforce.

Many are waiting to see whether the UK can retain “passporting” rights, which enable lenders to continue transact without restrictions across the EU.

Addressing reporters in Brussels on Tuesday, Chancellor Philip Hammond said the government would study the “costs and benefits” of continuing to pay for access to the EU single market after UK formally exits the union, echoing previous pronouncements made by Brexit Secretary David Davis.

Last week, Brexit Secretary David Davis said paying for continued access was a possibility.

Speaking at a tax event on Tuesday, Financial Secretary to the Treasury Jane Ellison acknowledged the concerns of the financial sector, and assured that the government would be negotiating for an deal that will help UK’s financial services sector to be “every bit as successful after our withdrawal as before.”

She adds that Brexit could also mean “new opportunities” for this economically-vital sector.

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UK firms ramp up investments amid Brexit worries  

British businesses appear to have shrugged off worries over the Brexit vote, increasing investments by a rate of 0.9 percent over the last three months, according to official government data released on Friday.

Earlier this year, the pound plunged after the Brexit referendum results became clear.

Economists expected the resulting inflation to slow down UK’s economic growth, but the latest data from the Office for National Statistics seem to be showing a different picture.

The increase in capital spending, which helped push the UK economy forward, beat earlier expectations of a 0.6 percent increase. The growth projection was based on a poll of economists conducted by Reuters.

The rise in investments was supported by a rebound in British exports as well as a sizeable increase in household spending, the ONS said in its report.  Overall, Britain’s economy nudged higher by 0.5 percent three months following the June referendum, where the vote to leave the European Union won.

The ONS, however, cautioned that most of the investment data covered by Friday’s report probably included expenditure decisions made prior to June’s vote.

Meanwhile, a separate survey by the Confederation of British Industry shows that UK retail sales likewise trended positively, rising at its quickest rate in more than a year in November. Experts project strong consumer spending to continue until the fourth quarter, driving economic numbers up.

While big firms such as Google, Facebook and Nissan have indicated their intentions to invest in Britain despite the uncertainty over the decision to leave the EU, recent surveys show that smaller companies are holding back plans for capital spending until economic outlook improves.

Anticipating a slow down in private investments in digital infrastructure, transportation and housing sectors in the near term, finance minister Philip Hammond said this week that his office will be borrowing 23 billion pounds to fund investments in these sectors over the next five years.

If you are unsure about your business’s financial future following the Brexit vote then please get in touch. At Assured FD Services we have over 20 years expertise working as a full and part time finance director for companies across Leeds & Yorkshire, aswell as the rest of the UK.

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Why The “Experts” Are Getting It So Wrong

2016 has been a year of poor predictions. First the shock of Brexit and then Trump’s presidency, in amazingly similar fashion.  It appears that in the case of political events sometimes the media experts should admit that their prognostic abilities are very limited. A different outcome was predicted in advance of both of these events and therefore the initial reaction was panic. The markets quickly recovered however; in the American elections on the very same day and as for Brexit, it was announced shortly after the British stock market had reached an all-time high. Both cases showing no trace of the feared recession or “Catastrophe”.

The effects of Trump’s election were less pronounced than Brexit, with the market falling at night and recovering throughout the day. In a crazy turn of events, some of the closing rates were even higher than the day before, the Swiss stock market reporting a daily plus of 2%, with the dollar impact discussed in a previous post.

So why did the experts get it wrong?

It’s hard to answer this one specifically but some factors to take into consideration are:

a) The “experts” tend to use the voting polls to assess which way the election is going. The problem here is that the sample polls are either very small or from completely unknown sources. This has been shown time and time again to be largely unreliable.

b) The forecasting results from the surveys are based on past models.

c) In the case of the Presidential Election, Trump supporters were looked down upon in the lead up to the polls, this meant that you had a lot of silent Trump supporters who didn’t want to admit to supporting Trump until it came time to vote, similar to the “Bashful Brexiters” of the UK.

d) Another reason provided was that many of the people who voted for Trump were first time voters. Because experts didn’t think they would show up to vote they weren’t included in the ‘likely voter’ demographic forecasts.

e) No matter what the result, it is almost impossible to predict how the stock market will react in the long term. More immediate effects such as a quick drop e.g. Brexit can be more fairly assessed but medium and long term effects are unknown to everyone.

Since Donald Trump’s election he has promised to invest heavily in infrastructure, renewals, tax reductions and “great” economic growth. Hopefully, this means that he will have a positive effect on the American economy and American companies.

Trump has also said that Britain would be “at the front of the queue” for any trade deal after Brexit and Trump is keen to keep up our “special” trading relationship. This could eventually lead to a stronger pound which is great for British companies that import goods from abroad, but bad for British companies that sell their products overseas.

The story continues…

If you are unsure about your business’s financial future following the Brexit vote and US election then please get in touch. At Assured FD Services we have over 20 years expertise working as a full time and part time financial director for UK leading companies, therefore you can rely on the service we provide.

 

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Business Confidence and Strategy Following The Brexit Vote

There is no doubt that as we continue to steam towards Article 50 and (officially) begin the journey of Brexit, the majority of us with a vested interest in UK business feel a degree of anxiety. With the media spouting their usual negative spin, you can easily understand why.

Business investment and growth is usually led through confidence of the business market and the people within it. So, how have small businesses reacted to the vote and how do they plan on coping with Brexit?

In the following article by Enterprise Nation, you can view the results of a recent study focussing on business confidence following the vote:

 

Small Business Barometer Summer 2016

The authoritative Small Business Barometer report, which polled 800 small companies and consulted dozens more via focus groups, found an astonishing 68% were expecting to swell in the last quarter of 2016, despite acknowledging Brexit uncertainty.

Of those, 59% said they were planning to boost profits by introducing new products or services.

While 36% said they were more confident about the next six months than previously, 24% said confidence remained the same. Of those that were more confident, one fifth put the increased optimism down to organic growth.

View an infographic of the main results here.
Small Business Confidence Infographic 2016

See full post here…

 

The results of this study paint a clear picture of an optimistic UK business landscape. It has highlighted, however, that strategy is at the forefront of their minds. IDF have offered their opinion on the export opportunities they believe small businesses should be considering as part of their strategy:

Why should your small business consider exporting?

Figures released during ‘Exporting is GREAT Week’, highlighted that there are a number of opportunities available for UK SMEs who are considering export.

In total, over 6,000 export opportunities have been showcased at exportingisgreat.gov.uk, since November 2015, equating to 40 new opportunities to export every day, that is one every 36 minutes!

Whilst SMEs account for 99% of all UK businesses, they currently only make up 33% of our total goods exports, begging the question, “Why aren’t more businesses making the most of the opportunities that exporting presents?”

Click here to read the rest of this post…

With the sterling dropping to the lowest levels in decades, exporting goods and services seems like a naturally progressive strategy consideration for any business wanting to strengthen their position.

If you believe you may require advice on business finance and growth strategy to guide you through Brexit, the services of an Interim Finance Director would be a perfect resource.

If you have any concerns about your business’s performance presently and in the future, Assured FD can help. Contact us today.