May 4, 2018
Thomson Reuters Brexit survey reveals that a third of companies anticipate relocating staff from the UK
Slight rise in confidence in political leaders to deliver Brexit
LONDON – A Thomson Reuters survey of 100 Chief Financial Officers (CFOs) across the UK and Europe has revealed that 31% of companies anticipate relocating staff from the UK because of Brexit, a rise of 10% since the Summer of 2017.
The CFO Brexit Survey, which launched in June 2017, is conducted quarterly by the Thomson Reuters Tax and Accounting division and polls companies that generate from $100 million to more than $5 billion in revenue annually, across various sectors. It asks what impact Brexit has had, or will have, in the following areas: company expansion, investment, headcount, relocation, and compliance. This survey was conducted in March 2018.
There is continuity for many companies, as 40% of businesses continue to say that Brexit is impacting their strategic planning; this is identical to the last survey, released in December 2017. Likewise, the number of business leaders who anticipate neither increasing or decreasing staff in the UK has remained constant at 51%; this figure was an almost identical 44% in December. Likewise, 34% of companies say that they are still planning for a “no deal” scenario, a slight decrease of 4% since the last survey of 2017.
Since the Summer of 2017, the percentage of companies that are “only observing” the process, rather than taking action to plan for Brexit, has almost halved, from 43 to 22%. A further 36% are scenario planning the various potential outcomes of the Brexit negotiations, while another 22% are investigating moving functions out of the UK.
“Businesses appear to be holding fast to a ‘wait and see’ attitude, and a sizable minority (37%) have held off from investing in the UK, which suggests that the full impact is yet to be felt,” said Laurence Kiddle, managing director for the EMEA Tax & Accounting business at Thomson Reuters. “However, the slight rise in confidence in the political leaders negotiating Brexit – and a recognition that there may be some business benefits, particularly in reducing UK tax rates and in deregulation - suggests business leaders are beginning to feel increased faith in the process”
Respondents were asked to rate out of ten their confidence in the political leaders’ ability to deliver a positive outcome for their business. The Conservatives on the list have all seen an increase of a point at least across the board; Prime Minister Theresa May’s score has increased from 3.25 to 4.5; Foreign Secretary Boris Johnson has increased from 2.5 to 3.7, and Brexit Secretary David Davis has risen a whole point from 3.57 to 4.5. Jeremy Corbyn, the Leader of the Opposition who was included in the survey for the first time, was at the bottom of the table and scored 3.2.
Similarly, when asked whom they felt most confident with the UK economy, Philip Hammond’s score increased from 4.8 to 6.1 in the most recent poll. Likewise, the Prime Minister’s rating has risen from 3.47 to 4.9. However, the Shadow Chancellor, John McDonnell, who was also included in the survey for the first time, was ranked at 3.6.
Download the Q1 2018 CFO Brexit Survey.
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