Bishop Fleming has issued a five-point wish-list for the Chancellor’s Autumn Statement on November 23.
According to managing partner, Matthew Lee, the Autumn Statement will be a “Brexit Budget” in all but name, allowing the new Chancellor to “reset” economic policy following the referendum.
Lee said: “I hope to see cuts in tax and red tape to stimulate business growth and boost consumer spending, as well as major new infrastructure spending. It should be the economic starting block for the UK’s future direction of travel in a post-EU world and to signify that the UK continues to be a great place to do business. Here are the five items the Chancellor should announce.”
- A reduction in the rate of VAT to stimulate consumer demand.
- An increase in the Annual Investment Allowance to encourage companies to invest in new technology, plant and machinery to help boost productivity. The allowance should also be widened to include improvements to business premises.
- Exempt existing loans of residential landlords from the planned phasing out of tax relief on their finance costs; so only new loans will be affected. This would substantially reduce the need for landlords to increase rents or sell properties, helping to avoid a housing crisis. If the Chancellor fails to take action on this, many landlords who have borrowed heavily against their properties face bankruptcy when the increased tax charge can no longer be covered by their net rental income.
- Scrap the planned and complex Inheritance Tax residence nil-rate band, and instead increase the existing £325k threshold to cover all assets, simplifying the tax system and making it fairer for all families.
- Revise the planned changes in Vehicle Excise Duty that will otherwise see tax being charged on electric and other zero emission cars. The government encouraged car manufacturers to build low-emission vehicles, but next year’s changes will see owners of the smallest and least polluting cars being taxed more, whilst owners of high emission cars will be taxed less. How does this help our environment or indeed our car industry which has invested so heavily in making cleaner cars?
Coupled with this revision, the Chancellor needs to look at other ways of cleaning up the environment while raising revenue, for example by charging overseas trucks that damage our roads – mirroring what already happens throughout Europe.
Lee said: “The new Chancellor can take measures to make a real difference to Britain’s business environment. His predecessor attacked entrepreneurs with assaults on pensions, dividends and employment taxes, which were counterproductive. More than ever, we need entrepreneurs who can drive the economy forward; we need growth, growth, growth.”