Top 50 accountancy firm MacIntyre Hudson has predicted that the Budget will offer “only minor incentives to woo the business-owners’ vote”, and called on the Government to take responsibilty for paying tax credits away from the Inland Revenue.
The firm demanded consultation on “reviled issues”, citing what it called “the Government’s obsession with stamping out tax avoidance”.
Partner Victor Dauppe said any increase in the “most obvious” taxes such as income tax, NIC and VAT “is unthinkable”. But he added that with “an ever-growing deficit” Gordon Brown “has no scope for the usual pre-election hand-outs”.
“In one sense this is good news for business – it’s unlikely there will be anything nasty or unexpected,” he continued.
“However, this is little comfort for the businesses for whom the increase in complicated regulation and the growing focus on ‘anti avoidance’ is as much a legacy of this Chancellor as is the stable economy and independence of the Bank of England.”
‘Reviled issues’
The firm declared that the Budget presents a “golden opportunity” for Brown to announce consultations on some of “the more reviled issues”.
Brown has promised to encourage enterprise through tax incentives, it said, “yet such initiatives are undermined by the Government’s obsession with stamping out tax avoidance. Reform of these initiatives would add weight to the Chancellor’s claims to be a champion of enterprise.”
Tax credits
MacIntyre Hudson urged the chancellor take responsibility for awarding tax credits away from the Revenue.
Dauppe said the Government had “made the Inland Revenue face two ways at once” by making it responsible for incentives and tax credits as well as the generation of tax revenues. “The evidence suggests that this isn’t working,” he said.
IT equipment and electronic filing
Other possible sweeteners for small business are the reintroduction of accelerated capital allowances for IT equipment and greater incentives for electronic filing, the firm said.
Dauppe added: “The Government likes to be seen as modern and wants to encourage an IT literate and web aware population. By bringing back capital allowances for IT equipment and encouraging online tax return filing, the Chancellor could be seen as doing something positive for smaller enterprises.”
Andrew Goodall
Editor, TaxZone
