RSM Ireland

RSM US warns US companies with UK subsidiaries of Brexit consequences

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Lead Tax Partner from RSM Ireland to discuss Brexit implications and solutions.

 

Today, RSM US is holding a joint event with Quarles & Brady LLP in Chicago, USA aimed at informing U.S. companies with subsidiaries in the U.K. and Northern Ireland about risks in the run up to Brexit and how they need to prepare in the instance of a deal not being reached by the March 2019 deadline.

The event will inform companies of the major issues that lie ahead in the areas of taxation, intellectual property, data protection and labour. Speakers will discuss the implications of a hard Brexit, such as US companies no longer having access to the EU directives which could give rise to withholding taxes on payments made from the EU to the UK subsidiary. Other implications are delivery delays by border control and customs enforcement as well as the cost of VAT on goods shipped into EU.

Speaking at the event today in Chicago, Aidan Byrne, Lead Tax Partner at RSM Ireland, will warn US companies who have UK subsidiaries that a complicated road lies ahead for those operating in a post Brexit UK, while also explaining that companies can mitigate against these risks by putting steps in place now.

“US companies with UK and Northern Ireland subsidiaries need to plan for a multitude of circumstances arising from Brexit,” said Aidan Byrne. “Once the UK leaves, the free movement of people will no longer exist, and the current talent pool of 550 million people will shrink to 65 million people for UK businesses. This may lead to staffing issues between different countries post Brexit. One potential solution is to create dual headquarters in the UK and Ireland. Companies could also role employment of French and German staff to Irish companies to preserve EU assured employment rights."

“Care is required regarding registration of a business’s IP and thought should be given to bifurcation of that IP into UK and Non-UK IP for use in the EU. Many EU countries have attractive tax regimes with low tax rates for exploitation of IP and it may be an opportune time to review this, whilst the UK remains within the EU with the benefit of the EU’s tax directives.”

“In terms of taxation, companies should consider the splitting of businesses into UK and non-UK for the EU market in advance of Brexit to avoid any anti-avoidance measures that will be introduced to avoid a flight of capital and to maintain a presence in both markets post-Brexit,” He said.

The seminar will be attended by CEOs, chief financial officers, chief operating officers, general counsels, senior financial personnel and risk management executives in the Chicago area.

ENDS

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