Brought to you by
cch
CCH-branded products and services are from Wolters Kluwer, one of the world’s largest providers of...
Save content
Have you found this content useful? Use the button above to save it to your profile.

Budget 'tinkering' likely to increase tax burden on business

24th Mar 2006
Brought to you by
cch
CCH-branded products and services are from Wolters Kluwer, one of the world’s largest providers of...
Save content
Have you found this content useful? Use the button above to save it to your profile.

BUDGET 'TINKERING' LIKELY TO INCREASE
TAX BURDEN ON BUSINESS AND ITS PROFESSIONAL ADVISERS

HM Treasury's tinkering with tax law is likely to increase the regulatory burden on UK business and its professional advisers.

And according to CCH, the leading provider of tax information, consultancy, training and software for the tax and accountancy professions, this could have a detrimental effect on companies' commercial success.

The comments come after Gordon Brown's tenth Budget, in which the latest proposals were announced in areas of tax with which tax and accounting professionals and UK industry were still fully getting to grips.

Key areas which are now likely to see change include various employee benefits, capital allowances and the zero per cent corporation tax rate.

Ray Chidell, author of several leading CCH tax books and a senior technical editor with CCH, says: 'Tinkering is everywhere in this year's Budget, and the weight of tax law becomes ever greater as a result.

'The Budget paperwork includes 64 'Budget Notes', five 'Press Notices', two 'News Releases' and a host of other documentation - it is tempting to imagine that there might be a better way of doing things, quite possibly even by doing almost nothing in some years.

'There are now numerous examples of measures that the Chancellor has both introduced and abolished, such as, for example, the zero per cent corporation tax rate

'There was much trumpeting when the zero rate was brought in, but its abolition too is announced in positive terms ' the Budget's press release states that the reversal 'will simplify the corporation tax position for small companies with a single CT rate replacing the starting and non-corporate distribution rates'

'Businesses that have to operate under the tax regime, and the tax and accounting professionals who provide advice and guidance on how to do so are coming under increasing pressure from the volume of rules they have to consider, when a more stable approach to tax law could well benefit all parties.'

Ray Chidell believes employee benefits is one key area where this tinkering could have a very visible effect on the way businesses work.

He continues: 'In this year's Budget, there were several unexpected proposals addressing the minor exemptions enjoyed by employees, such as those for employer-provided mobile telephones and computers, both of which were relatively uncomplicated measures applying they were introduced by Gordon Brown in April 1999.

'It's difficult to imagine that the tax at stake on mobile phones, which will now be restricted to one telephone per employee, is terribly significant in the grand scheme of things.

'The more contentious provisions might be those relating to computers made available to employees, where, with little further explanation, we are told simply that the measure 'will remove the exemption for computers made available by employers to their employees for private use'.

'But at the same time, the Government itself, via the DTI website, still says that 'the most effective ways of realising the potential of the workforce and the organisation is for employers to make computers for home use available to as many employees as possible.'

'The concern now may be that employees will be less willing to utilise technology for fear of receiving an unexpected tax bill, as it's safe to suggest that PAYE reviews carried out from summer 2007 will involve lengthy discussions about levels of business and private use of work-provided computers.

'HMRC's avowed aim is to reduce the burden for businesses of dealing with tax forms and returns by at least ten per cent over five years. But if huge numbers of employers have to start estimating such matters as the level of private use of work computers, and if several years' discussion and lengthy consultation documents are needed to resolve issues as simple as the meaning of an 'expensive car' for tax purposes, this Budget seems to be taking some fairly major steps in the other direction.

'In the end, even the weightiest of the measures in this week's Budget will be of little lasting significance compared to the new regime for pensions, applying from 6 April - against that background, tinkering with exemptions for computers seems trivial indeed.'

The fully updated and annotated text of the enacted tax legislation and documentation will be published by CCH shortly after Royal Assent of the Finance Act 2006 in CCH's 'Red and Green' Tax Handbooks.

- ENDS -
Issued by Robson Brown Public Relations on behalf of CCH, part of Wolters Kluwer (UK) Limited.

For further information, please contact:
Sarah Hall / Julian Christopher
Tel: (0191) 244 6655 / (0191) 244 6653
Email: [email protected] / [email protected]
Fax: (0191) 244 6622

Notes to editors
About CCH
CCH, part of Wolters Kluwer (UK) Limited, is a leading provider of specialist products and services for the accounting, tax and finance professions. Currently 17 out of the top 20 accounting practices in the UK rely on CCH for information, software, fee protection insurance, professional development, magazines and telephone advice. For more information visit www.cch.co.uk
About Wolters Kluwer UK
Wolters Kluwer UK, part of the Global Wolters Kluwer Group, provides information solutions, software, expert advice and consultancy to both public and private organisations of all structures. For over 50 years, CCH and Croner, its two main UK operations, have strived for excellence and to be the professionals' first choice in their respective markets. Croner provides legal compliance and best practice advice in the areas of human resources, health and safety, environmental management, local and central government, education and trade and transport.

Wolters Kluwer UK is part of Legal, Tax & Regulatory Europe, a division of Wolters Kluwer. Wolters Kluwer is a leading multinational publisher and information services company based in Amsterdam, the Netherlands. For further information, please visit www.wolterskluwer.co.uk

CCH is a trading name of Wolters Kluwer (UK) Limited, Registered number 450650. Registered office: 145 London Road, Kingston upon Thames, Surrey, KT2 6SR. Wolters Kluwer (UK) Limited is authorised and regulated by the Financial Services Authority (FSA) for general insurance business.

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.