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Budget 2017: Wish list

Spare us complex tax changes and form filling

Susie WalkerWe are expecting and hoping for limited tax changes in tomorrow’s Budget. Businesses and tax professionals have borne substantial uncertainty around some fundamental changes to the tax system which remain unresolved.

Making Tax Digital, the end of the tax return, was announced despite being ill thought through.

The implementation date is still 2018 but at this moment we have no idea as to the thresholds and what magical free software HMRC will provide to automate the collection of tax.

The number one priority for the Government is to get cash tax in its hands, but it did not consider the complexity of tax legislation on which we base the computations of tax payable, e.g. farmers averaging; how they compute tax payable and are they going to pay advisers to get the real time computations as ‘right’ as these can be?

The Government somehow has to balance the books and it is the hidden taxes and extra bureaucracy year on year that costs businesses more money in order to be ‘compliant’; items such as the Apprenticeship Levy, NIC, IPT and Customs Duty.

For corporates, there are new and complex rules effective from 1 April 2017 on interest relief and losses. The former scraps Worldwide Debt Cap and brings in new legislation that the best of tax brains are still trying to understand.

We hope for few changes tomorrow and a period of stability and certainty. If anything, it would be useful to see more tax reliefs to encourage investment in start-up businesses to help balance the penal business rate increases that many suffer from.

What would we like to see?  My top 4 are:-

  • More consultation before widespread tax changes are introduced.
  • Rural broadband improvement. According to recent news reports, the Government is considering how to boost broadband connectivity in rural areas, and that could come in the form of vouchers worth £3,000 for small businesses.
  • Less form filling and bureaucracy around the likes of Customs Duty changes. New rules were brought in without HMRC understanding the rules; there is no clear guidance, and no human beings to speak to at HMRC to discuss issues or how to practically apply the rules.
  • Human contact at HMRC. Agents spend a lot of wasted time hanging on the phone trying to get through to HMRC ‘helplines’. Can we charge clients for all this time? No.

Susie Walker is a partner and head of tax at Johnston Carmichael

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