Accountancy firm Bishop Fleming has issued a 10-point wishlist for the Chancellor’s Spring Budget, which is set to be delivered next month.
Matthew Lee, managing partner at Bishop Fleming, said: “We need a serious Budget for business to address a post-Brexit economy. I want to see cuts in red tape and reforms which will have a real impact on stimulating growth and consumer demand. Here are ten items the Chancellor should announce.
- A reduction in the rate of VAT to help stimulate consumer demand.
- An increase in the Annual Investment Allowance to encourage companies to invest in new technology and machinery to help boost productivity. The allowance should also be widened to include improvements to business premises, which attract little if any tax relief.
- The landlord tax should not be retrospective. Existing loans of residential landlords must be exempted from the phasing out of tax relief on their finance costs; leaving only new loans affected. This will avoid landlords having to raise rents or sell properties, adding to the current housing crisis.
- Halt new employer red tape and spiralling labour costs. Over the past 20 years employers have had to cope with over 350 changes in payroll and pension regulations, averaging 17 changes a year. In recognition of the heavy burden placed on employers, there should be a moratorium on further regulation pending agreement on the post Brexit landscape.
- Re-think the Apprenticeship Levy starting in April 2017 to avoid it becoming poor value for money. This further tax and administrative burden placed on employers puts too much focus on target numbers of apprentices, rather than on what they are meant to be doing in a post-Brexit economy that will have less reliance on skilled migrant workers. Allowing the levy to be spent on internal training and development programs should be considered rather than restricting it to approved qualifications.
- Infrastructure spending. Whilst the government’s Modern Industrial Strategy green paper is welcome, the regions need a bigger share of public investment in digital infrastructure to help unlock the productivity potential of businesses.
- Delay Making Tax Digital (MTD) to beyond 2018. The rush into digitising the tax system before it has been properly piloted puts technology before results, creating a system likely to be rigged with extra costs, errors and unfairness. The project must be delayed for at least a year to give businesses more time to prepare and for the free software to be available. The turnover level at which MTD applies should increase to the VAT threshold.
- Re-think Business Rates. We need a simplified system of local corporation tax based on profits in order that business rates are linked to the ability to pay. The current system is expensive to administer and widely acknowledged to be unfair.
- Protect the self-employed with a statutory definition so that individuals can be clear as to their status. Retrospective action to reclassify the self-employed as employees should not be permissible once a new definition is established.
- Reduce tax complexity that hampers growth, causes taxpayer confusion, costly errors and needless penalties. We need a radical simplification of the tax code to coincide with its digitisation. Such complexity creates contradictions and loopholes, and hinders innovation.”
Lee added: “Serious measures are required to make Britain’s business environment fit for a future independent of the EU, and one that is attractive to both entrepreneurs and inward investors. More than ever, we need a fiscal strategy that can clearly drive the economy forward.”