Spring budget: 'scepticism' from Nottingham tax director that immediate concerns addressed

Added by Love Business East Midlands | 15 March 2023

BUDGET MEASURES TARGET THE WRONG BUSINESSES AT THE WRONG TIME, SAYS NOTTINGHAM TAX EXPERT

Ian Dickinson, tax director at the Nottingham office of UHY Hacker Young, said:

“This Spring Budget has reinforced my scepticism that businesses and their employees across the East Midlands are not having their immediate concerns addressed.

“The confirmation of the substantial rise in corporation tax, from 19% to 25% of profits from April, undoubtedly comes as a significant disappointment for many businesses, although we have been planning with clients for this change.

“The introduction of the new full expensing deduction may also not appeal to the majority of our owner managed businesses.

“For more than ten years there’s been an annual investment allowance in some capacity so this is not ground-breaking, and I don’t believe this will incentivise more businesses to necessarily spend more. Most of our clients for example are not expecting to be spending close to this figure as cash is scarce for businesses to be able to invest just to save tax.

“Similarly, the replacement of the super deduction which gave relief at 130%, with full capital expensing offering only 100% relief for the next three years, is unlikely to bring much value to many businesses in the wider context of innovation across the region.

“A series of vague commitments have also continued to carry over, including a crackdown on tax avoidance schemes, as well as a new investment zone in the East Midlands - which can have very localised benefits that I would expect to take many years to get off the ground.

“Likewise, for the majority of my clients, I am cautious as to whether the abolishment of the lifetime tax-free allowance will really make a difference for the vast majority of personal clients and business owners, regardless of how well they have saved.

“While these announcements bring opportunities for already profitable owners to thrive from the tax changes to the pensions allowances specifically - thinking about the bigger picture, I don’t see how these changes will lower the tax burden for many who are struggling for immediate cash in order to survive.

“Overall, my concern is whether these measures will provide the right support in the right timeframes given the uncertainty we are currently living through and will face politically over coming years.”

For more information about UHY Hacker Young, please visit www.uhy-uk.com or call 0115 959 0900.

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