Tax breaks wont make UK more attractive to German business: study
The U.K. will become less attractive to German family-run businesses after Brexit, regardless of whether the government lowers its tax rate for business, according to a new study published Thursday.
The study — commissioned by Stiftung Familienunternehmen, a lobby for German family businesses, and the Munich-based Ifo Institute — asked 1,250 German companies currently doing business in the U.K. whether potential “British tax reforms and reductions can offset the potential disadvantages of Brexit.”
More than one in four companies — 27 percent — answered No, while a little over one in 10 companies — 11 percent — said lower tax rates could make a difference. Companies were surveyed between April and July.
Among larger companies with more than 250 employees, the share who responded negatively was as high as 37 percent, while about 15 percent said they thought a new tax scheme could make up for Brexits disadvantages.
Family-run businesses are particularly vulnerable to Brexit, the study found, because “in addition to the significant trade policy risks,” the German government has not yet resolved many issues that are important to family businesses and their shareholders.
“For family-run businesses the legal uncertainty ahead of Brexit is an enormous problem,” the head of Stiftung Familienunternehmen, Rainer Kirchdörfer, said in a statement. “Brexit will burden the economies in Germany as well as in Great Britain.”
Kirchdörfer called on the German government to take steps to “avoid unnecessary hardship” for family-run businesses, which make up 90 percent of German businesses, according to the study.