ACCA’s Pre-Budget Report Wish List
Chas Roy-Chowdhury, head of taxation at ACCA (Association of Chartered Certified Accountants) says: “Stimulating the economy will be the main driver behind this year’s Pre Budget Report (PBR). Measures need to be bold and the measures need to be big enough to do the trick. It must also be co-ordinated to have a wide impact and multiplier effect on the economy.”
Tax
• ACCA wants to see more certainty, simplicity and transparency in the UK’s tax system – for businesses and for personal tax payers.
• VAT cuts – this is a possibility, but any cuts would be hugely expensive for the government. This would have to be a general cut across goods and services.
• The prospect of subdued demand creates expectations of poor business profitability. This discourages the creation of new jobs and new businesses and makes it harder for firms and individuals to obtain credit. How can the government put more money in people’s pockets so they spend? Perhaps by reinstating the 10p tax band for the lowest paid; also by increasing tax credits and by increasing personal allowances so that 40 per cent rate payers have more to spend.
• A Stamp Duty Land Tax holiday for all property transactions – rather than just those of £175,000 or less.
• In Spring 2008 the government deferred the 2p fuel tax to October 2008. ACCA believes a further delay would be welcomed, despite petrol prices falling recently.
• There is also a possibility to reduce National Insurance Contributions (NICs) for employers and employees, which would help put money in the pockets of individuals.
Small and Medium Sized Enterprises (SMEs)
• A pledge of renewed support for the regulatory reform agenda - cutting unnecessary costs to business is a great way to increase employment and economic activity among SMEs, and it's free.
• Late payment needs to be tackled so that businesses' problems are not magnified as they are passed down the supply chain. The government’s latest initiatives on prompt payment of government contractors are impressive, however government commitment to enforce prompt payment will be welcome and government itself needs to set an example to the private sector.
• A prompt reaction to the Glover Review's recommendations on opening up the public procurement market to SMEs and the Anderson Review of regulatory guidance.
• Reallocating skills funding to small and micro businesses - current plans are based on assumptions of growth, but large employers are clearly looking to substantially reduce their headcount, for example by divesting skills.
A demand-led system of skills provision should now focus on those areas of demand that are still healthy.
• A review and extension of the Small Firms Loan Guarantee scheme to target more established businesses and shorter-term debt. ACCA would particularly like to see the Government's 2% premium waived, at least for partnerships and sole traders.
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Notes to Editors
1. ACCA is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 325,606 students and 122,426 members in 170 countries worldwide.
2. ACCA has worked with governments, national organisations and development agencies in emerging economies for over 20 years –promoting the accountancy profession, to create value for the communities, businesses and individuals it serves.
3. ACCA believes that globalisation of business means that one set of reporting standards is essential. We favour the principles based IFRS.
4. ACCA understands the real issues facing businesses as 63,000 of our members work in SMEs or small partnerships worldwide.
For further information please contact:
Chas Roy-Chowdhury, ACCA Head of Taxation phone: +44 (0) 20 7059 5976 mobile: +44 (0) 7710 707516
Helen Thompson, ACCA Newsroom phone: +44 (0)20 7059 5759/ 07725 498 654 e mail: helen.thompson@accaglobal.com