Final Spring Budget Is No Spring For UK Entrepreneurship
The final Spring Budget has been met with mixed reactions from ACCA (the Association of Chartered Certified Accountants).
Chas Roy-Chowdhury, head of tax at ACCA, says:
'While it is great to see that the government has listened to the concerns of the business community with regard to business rates and the upcoming rollout of Making Tax Digital (MTD), ACCA is concerned that an increase in the NIC for the self-employed will be harmful for UK growth and entrepreneurship.'
Raise benefits before taxes when it comes to self-employed
'Self-employees are subject to a lower national insurance contribution (NIC) because they do not receive the same entitlements and benefits as their employed counterparts - such as holiday and sick leave. Before this tax is raised, the government needs to think carefully about ways to align the level of benefits.
'The government still has time to do this, as the increase will be phased in over two years. I look forward to hearing more about how it intends to address the issue of parental entitlements.
'In a time when we are trying to encourage innovation and create a Britain that is 'open for business', we should not be creating barriers to entrepreneurship and self-employment.'
Business rates relief welcome, but not enough
'I welcome the news that the government has listened to the serious concerns of the business community around the upcoming revaluation, and has allocated reliefs accordingly.
'However, I am not sure that these measures will go far enough to address the pressures on our bricks and mortar small businesses. There is just not enough money in the relief fund (£300 million) for local authorities to significantly help hard-hit businesses in their community.'
Tackling avoidance, evasion and non-compliance
'This sounds like a good measure in theory, but there is an existing Professional Conduct in Relation to Tax (PCRT) code of conduct.
'Tax professionals who are subject to this existing code, which has been developed in conjunction with HMRC, should not be subject to this new measure.'
Making Tax Digital: a step in the right direction
'It is good to see that the government has listened to the concerns of ACCA, amongst others, about the undue burden on small business that MTD would create.
'We welcome the move to delay the implementation of MTD for one year, for businesses with turnover less than £83,000.
'However, we would encourage the government to continue with this carve-out indefinitely: excluding businesses within this threshold altogether as they are most impacted by the additional administrative burden that MTD filings would create.'
'The Chancellor's reduction in the dividend allowance is a major policy u-turn in less than two years.
'I would be concerned if this meant that the government is considering removing the allowance altogether when it was originally proposed as an offset for increases in dividend taxation. If it is removed altogether, the taxation on dividends should be reduced.'
Final Spring Budget Is No Spring For UK Entrepreneurship, 8th March 2017, 22:15 PM