There’s a lot of talk and pressure to reduce the tax burden which has risen sharply but it may be too early to look at cutting taxes. What with inflation and interest rates as they are I’m expecting this statement to be quite political and less dramatic than the Spring Budget due in March.
My clients are struggling with corporation tax, the minimum wage and national insurance increases, so from a business point of view it’s having a very negative impact on clients and business confidence.
I’ve been asked if there’s a chance the capital allowances could increase in order to encourage business, which we saw a couple of years ago but it’s been watered down over time and it is something we would support and like to see. There’s been talk about cutting or abolishing Inheritance tax which sounds good but it could be a political move, it could possibly be seen as a tax on the rich which may go against votes in the next election.
He may look to do something on stamp duty for first time buyers, and maybe something on the pension triple lock with that becoming more expensive to support. It might be one budget too soon to consider a change to the higher rate tax bracket.
They seem to be back tracking on R&D and clamping down on the rules so it doesn’t seem to be as generous as it has been in the past for helping businesses. There has been an increase in the use of Employee Ownership Trusts which are a tax break and so is good for business but therefore costs the government. I hope that he doesn’t touch capital gains tax for businesses which would impact those looking at buying and selling which helps the economy.
There’s a lack of long-term vision, which impacts business investment and confidence, anything they do won’t likely happen too quickly so they could signpost dates in the next couple of years and try to garner favour with voters. It’s getting more expensive to run a business and employ people and people are feeling the squeeze so anything they can do to help ease that pressure would be good from mine and my clients’ perspective.