Ahead of today’s Budget, Paul Falvey, Tax Partner at BDO, looks at what businesses want to see from the Chancellor
Business leaders are adamant that Hammond should not lose focus on the domestic business agenda during EU negotiations. Businesses are keen to see a quick deal on Brexit but do not want the government to lose sight of the importance of UK growth. They want to see the government invest in the future by spending today and they’ll be looking to the new Industrial Strategy as evidence of imminent action.
58% of businesses believe that investment in physical and digital infrastructure, addressing the housing shortage and focusing on boosting business confidence and investment would strengthen the UK economy as it steers its way through Brexit negotiations.
Nearly two-thirds (62%) of businesses would support a simplification of the UK tax system even if this meant a rise in taxes. However, for many this tax rise would need to be marginal with 37% of businesses saying they would not want to see taxes increase more than 3%. The UK tax code is hugely complex and an obstacle to growth for UK businesses. Firms appear to be saying loud and clear that they would very much be in favour of a simpler system even if this meant paying slightly more for it. A commitment to setting out a coherent tax strategy and tax simplification roadmap for the next decade would be a real bonus for business and show that the government is on their side during these uncertain times.
The poll also showed that across-the-board simplification is needed in the tax system. Businesses want the government to take decisive action with 60% saying that everything from aligning income tax and NIC to tackling the issues of the gig economy need addressing. The UK tax code contains 10 million words and ever-changing legislation is adding to the administrative burden businesses are facing. Firms are fed up of the government tinkering at the edges and want to see simplification across the board. In addition, the UK’s tax strategy needs to move with the changing nature of the work force. How those that are part of the gig economy are taxed needs to be addressed by the government.