Scotland’s exporters and international companies are facing increasing uncertainty in one of the country’s key markets, according to a leading business growth and financial advisor.
Recent discussion and debate has focused on our future trading relationship with Europe, but Grant Thornton is warning a lack of clarity in the US on its future tax plans is fueling growing concern in the business community.
Despite assuming office in January, President Trump has failed to outline the finer details of his proposed overhaul of the country’s often-complex tax arrangements. Last month, the President offered some insight into his plans, including territorial exemptions for offshore income at an unspecified rate, a one-time tax on un-repatriated earnings – expected to be around 10%, and a cut in corporation tax to 15%. While the plans provided some new detail, much of the content was largely a restatement of Donald Trump’s election campaign goals, leaving many businesses that export to or have investments in the US, seeking far more detail.
Political observers in the country have also raised concerns that many of the elements of his reform plans would face serious procedural hurdles from the Democrats and potential long-term challenge from the Republicans, who are keen to exert greater influence in the process.
Vishal Chopra, Head of Tax in Scotland at Grant Thornton, commented:
“President Trump took office on a pledge to adopt protectionist economic policies while also radically overhauling the tax system. Since his first day in the White House, Scotland’s global businesses have been thirsty for clarity on what that means in practice. To date, that much-needed additional information has largely failed to materialise.
“Naturally, a reformed, more modern and transparent tax system would be good news for investors, but there’s a real fear that policies designed to put ‘America First’ could disadvantage Scotland’s export market. Excluding the rest of the UK, the US is Scotland’s number one export market, netting £4 billion for our economy. In a time of increasing political and economic uncertainty, we need reassurance and clarity to avoid long term damage to Scotland’s trading relationship with a key partner.”