It’s been a busy few days on the Brexit front, and with only a month and a half to go, some more clarity is emerging around where we need to be in financial services from New Year’s Day.
This is a quick overview of recent topics of interest and as always, remember you can get more information from your regular FSTP contact or by contacting us here.
HM Treasury Equivalence Decisions
Rishi Sunak has expressed his disappointment in the lack of progress around discussions on the future of financial services between the UK and the EU. He’s now advised Parliament of his plans to allow EU firms preferential access to UK markets into the new year.
Whether this is seen as a cynical powerplay or a show of good faith depends on your politics, however, it does give some small degree of certainty in respect of traffic from the EU into Britain as time runs out on the clock.
A bundle of equivalence decisions has been announced by the Chancellor covering a wide range of topics affecting future financial services relationships across the EEA. The full transcript of the Treasury notification is available here. The announcement covered some of the points previously highlighted in the FSTP Brexit Countdown updates.
Nikhil Rathi, CEO of the FCA made a speech at an online conference hosted by the City of London last week indicating his organisation’s goal to assist in promoting a transition towards a greener future in the UK. The FCA says it has a role in ensuring transparency, trust in the green finance marketplace and the provision of tools to help firms do this.
Primarily, the regulator wishes to combat ‘greenwashing’- the misleading of customers into believing they are supporting a sustainable future, while lining the pockets of less scrupulous market participants. Larger companies are already gathering information for compulsory disclosure requirements at the start of the year. This is in line with the recommendation of the Taskforce on Climate-related Financial Disclosures (TCFD), and we can expect expansion to a wider range of firms in 2022.
All firms can assume the ‘clear, fair and not misleading’ expectation to play a part in a review of any claims related to climate protection by regulated firms.
For the more accountancy literate amongst you, there was an announcement in Parliament last week on Value Added Tax. In the future, financial services exports to the EU will be treated for tax purposes the same way as exports to other countries. This means that UK financial services firms will be able to reclaim input VAT.
Although this relates to a relatively small amount of the total trade in the sector, it means around £800 Million in reclaimed VAT will become available.
Over these past few weeks, I’m reminded of a couple of Stephen Fry quotations. Words of wisdom.
‘If ignorance is bliss, why aren’t there more happy people in the world?’
And, more prosaically,
‘Nothing in this world is as it seems. Except, possibly, porridge.’