The UK200Group welcomes tax tackling plans
The UK200Group of independent quality assured chartered accountancy firms and lawyers has welcomed measures introduced in the Chancellor’s Budget to help SMEs and micro-businesses.
Fifty days before the General Election, Chancellor George Osborne delivered his sixth and final Budget of this Parliament and recognised the contributions made by micro-businesses in terms of UK wealth and reducing the number of unemployed. SMEs make up around 99 per cent of Britain’s private sector businesses and it was noted by the Chancellor that unemployment is continually decreasing as it is set to fall from 5.7 per cent to 5.3 per cent at the end of the year. This is lower than the Office for Budget Responsibility (OBR) forecast issued last December stating that it would be 5.4 per cent.
Nick Willis, President of the UK200Group and Senior Partner at member firm George Hay Chartered Accountants said that he was pleased to see plans to support the self-employed and SMEs. “Our SMEs are the backbone of Britain and we have them to thank for the economic growth we’re experiencing, as well as the number of jobs they create.
“However, I am disappointed that the Chancellor did not take the opportunity to clarify the future tax allowances available on capital expenditure. The Annual Investment Allowance is due to reduce to £25,000 from 1 January 2016 and although the Chancellor said that this was too low, he did not indicate at what level it would be. Business owners need certainty when making their investment plans.”
Introducing a package of tax and spending plans to the Commons, Mr. Osborne announced that the personal tax-free allowance – which is set to rise to £10,600 next month following an announcement in the last Autumn Statement – will climb to £10,800 next year and £11,000 in 2017.
Measures for savers include not only increased flexibility for ISAs but also a new Help to Buy ISA. This sees the Government add 25 per cent to anything saved towards a deposit for a property (up to a maximum contribution of £3,000 on £12,000 invested) which will be useful help for first time buyers seeking to mount the property ladder.
To tackle tax evasion and avoidance, a wealth of initiatives have been designed to ensure that individuals and businesses who flouted the laws would be made to pay their ‘fair share’. A new Diverted Profits Tax will tackle multinationals who attempt to artificially shift their profits offshore; loopholes in Entrepreneurs Relief are closed with immediate effect; changes will be made to the rules on travelling and subsistence to discourage the use of ‘umbrella’ employment contracts; and more Accelerated Payment Notices (APNs) will be issued in the year ahead. Furthermore, it is announced that there will be tough sanctions on “serial avoiders” – that is people who habitually buy into tax avoidance schemes which are found not to work.
Plans to abolish the need for tax returns are met with some scepticism. David Whiscombe, Director of Tax at UK200 Group member firm BKL comments: “It’s easy enough to see how that could work for people whose only income is from employments, UK dividends and interest. It’s much less easy to see how HMRC are going to deal with property investors, traders or professionals – or indeed anyone who chooses not to have internet access.”
Generally however, Whiscombe welcomes the measures. “It would have been very tempting just before a General Election to have big handouts, but George Osborne has been quite clever. He’s mixed some well-targeted reliefs with some closing of loopholes and by stealing some of the opposition’s policies he’s made it difficult for them to criticise with much credibility. He will be thinking he’s done an effective job.”
Established in 1986, UK200Group is the leading mutual professional association in the UK with some 150 offices of quality-assured member accountancy and lawyer firms throughout the UK totalling over 550 partners, 150,000 business clients and global links in over 50 countries. UK200Group provide services and products that are designed to enhance the business performance of its members. Telephone 01252 401050, email firstname.lastname@example.org or visit www.uk200group.co.uk
UK200Group is an association of separate and independently owned and managed accountancy firms and lawyer firms. UK200Group does not provide client services and it does not accept responsibility or liability for the acts or omissions of its members. Likewise, the members of UK200Group are separate and independent legal entities, and as such each has no responsibility or liability for the acts or omissions of other members.
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