Top 30 advisory firm, Bishop Fleming, has issued a 10-point wish-list for the Chancellor’s Autumn Budget to be delivered on 22 November 2017.
The firm, which delivers accounting, tax, corporate restructuring and advisory services to businesses and private wealth advice to individuals, warns that Philip Hammond needs to use his first Budget since the general election to stimulate business growth and consumer demand.
Bishop Fleming’s Managing Partner, Matthew Lee, said: “The first Budget after a general election is the best opportunity to be bold, imaginative and transformative. This is needed now more than ever, particularly as we hurtle towards an economically uncertain Brexit in just 17 months’ time. The Chancellor needs to start positioning the economy to deal with the challenges and opportunities this presents; here are 10 items he should announce.
- Cut stamp duty as part of a broader package of measures to stimulate the housing sector, which otherwise risks falling into recession following the recent interest rate rise. The current, penal rates of stamp duty are economically damaging.
- Increase the Annual Investment Allowance to encourage companies to invest in new technology and machinery to help boost productivity.
- Delay Making Tax Digital (MTD) until the rules are clear. Whilst MTD has been delayed for income tax and corporation tax until at least 2020, there remains concern that it will eventually be introduced before it is ready. The rules need to be clear, it must be properly tested, compatible software must be available, and the system must be as error-free as possible.
- Making VAT Digital. VAT digitisation is being introduced from 1 April 2019, at the same time as we leave the EU. There are some real challenges ahead in ensuring a post-Brexit VAT and customs system is in place. Businesses will need government support in complying with the changes in order to avoid extra costs, errors and unfairness.
- Encourage and reward companies that export with an export tax deduction to help defray the extra costs they are likely to incur after the UK leaves the EU.
- Simplify road fund taxes so that individuals and businesses have clarity on what car taxes and benefits-in-kind charges are likely to be paid before purchasing a vehicle.
- Remove the High Income Child Benefit Charge that unfairly penalises middle income families by imposing an effective income tax rate exceeding 60 per cent where a parent earns more than £50,000. The government’s decision in 2013 to turn what was once called ‘family allowance’ into an income-related benefit created a poverty trap and added to the complexity and unfairness of the tax system for parents.
- Simplify Inheritance Tax (IHT) by having just one allowance of £500,000 per person, instead of a general nil-rate threshold of £325,000 and a separate residence nil-rate band of £175,000; the combined allowance will then be available against all assets and not just the family home. Having just one IHT threshold would reduce record keeping and the compliance burden.
- Reduce tax complexity that hampers growth, causes taxpayer confusion, costly errors and needless penalties. We need a radical simplification of the income tax system to reduce its 20-plus tax rates and allowances that even the tax office’s own computer cannot cope with. Such complexity creates contradictions and loopholes.
- Help the public health and education sectors. One way of lightening the enormous burdens on education and health budgets would be if people who were able to could contribute to the costs. This could be achieved by providing tax incentives for those who wish to ‘go private’.”
Matthew Lee said: “Serious measures are required to make Britain’s business environment less complex and more ready for a future independent of the EU, and one that is attractive to both innovators and investors. More than ever, we need a fiscal strategy that can clearly help drive productivity and the economy forward.”
Bishop Fleming will have full coverage of the Autumn Budget.