COMMENTING on today’s announcement by the Chancellor, ACCA Scotland Strategic Engagement Lead Susan Love said:
“Today’s statement addressing rising costs for business and households is cautiously welcomed by ACCA as a step in the right direction to encourage business investment and growth.”
“While this package will help in the short term, we need to see more action by the government to alleviate the increasing financial pressures on businesses in the medium and longer term. For our economy to return to growth, small businesses, in particular, will need more support to invest, innovate, develop their workforce, and expand international trade, than was promised today.
“We have frequently highlighted our concern about the complexity of the tax system, so welcome the government’s commitment to simplification – reaffirmed today – and look forward to seeing more detail. However the government should be mindful that the changes announced today do not add yet more complexity.”
Tax Simplification and IR35
“We welcome the aim to simplify tax from today’s announcement as the tax system is overly complex and burdensome for businesses, individuals and public bodies. A simpler tax system avoids the potential for mistakes and enquiries, which too often distracts HMRC from addressing serious and deliberate evasion.
“However the dissolution of the Office of Tax Simplification is worrying and will impact UK businesses. The OTS previously worked with holding agencies and provided guidance on previous tax reforms and regulations. Without the OTS and without further detail on reform, SMEs will still face a complicated and unclear tax system.”
“IR35 needed reviewed, with reform in April 2021 resulting in confusion about rules and regulations, leaving many businesses without the support they needed.”
Corporation Tax and National Insurance reversal
“The government’s decision to keep Corporation tax at 19% provides breathing space against rising costs and will encourage businesses to invest.”
“ACCA is pleased to see the announcement of a reversal of the increased national insurance rate, something which we cautioned the previous chancellor against introducing earlier in the year. While we greatly appreciate the need to balance taxes raised against increased spending for the National Health Service, we are concerned that the increasing costs of doing business are negatively impacting business viability, particularly for SMEs. This reversal of the increase has created some breathing space for businesses in this period of economic turmoil.”