In response to the Chancellor’s Spring Statement, ACCA’s head of taxation, Chas Roy-Chowdhury says:
‘There are many aspects of the tax system which have not received the attention they deserve due to the huge amount of resources diverted away from routine HMT and HMRC business over the last two years or so.
‘We must now consider the following areas seriously in order to make progress and support growth.
‘Digital taxation: we welcome the document that has been published today on the digital economy; however, we have said all along that the UK must not jump the gun. We must wait for the OECD to agree a global solution. If there are to be changes to the digital tax rules then we need to ensure there is no double taxation as well as nil taxation. The EU has agreed the OECD global route to a solution is the best approach and we entirely agree with this.
‘Capital Allowances and Intellectual Property Investment; the economy needs a confidence boost leading to greater levels of investment. We urge the Government to consider increasing and simplifying CAs. The allowances are now eight to 18% - they used to be a 25%. We must restore the rate to help bolster investment. Additionally, we might consider a time limit higher for First Year Allowance rate of around 50% to help businesses really ramp up investment to underpin economic performance.
‘The gig economy: this part of the economy is getting bigger by the second, yet there is no proper redress as to if any tax changes are required to deal with this. We need decisions quickly on the National Insurance requirements for individuals working in the gig economy and the businesses which employ in that sector. This is necessary both from a business to business level playing field as well as similar work and worker’s rights perspective including social security benefits such as sick pay and unemployment benefits.’
ACCA’s head of economic analysis, Michael Taylor says:
‘A downgrade in the Office for Budget Responsibility’s growth forecast for this year so far was inevitable given the slowing global economy and continued Brexit uncertainty. Below-trend growth is likely to persist through 2019 especially if Brexit remains unresolved. The good news is that the public finances are in good shape with a lower than expected deficit in the current fiscal year. A public sector deficit of around 1.1% of GDP will allow for some extra spending to be announced in the Budget later this year, assuming there is a deal on Brexit.’
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