The UK economy needs a confidence boost, says ACCA
Date
13 Mar 2019
Sections
Euro & Finance
UK in Europe
In response to the UK 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 (CA) 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 25%. We must restore the rate to help bolster investment. Additionally, we might consider a time limited higher 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 to level the playing field for businesses, as well as for worker's rights, including social security benefits such as sick pay and unemployment benefits.'
ACCA's head of economic analysis, Michael Taylor says:
'A downgrade in the UK 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 UK Budget later this year, assuming there is a deal on Brexit.'
- ends -
About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering 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.
ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
ACCA is currently introducing major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up-to-date and sought-after accountancy professionals globally.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com