The chancellor needs to focus on promoting economic stability and lightening the burden for British businesses, according to the Institute of Chartered Accountants in England and Wales.
The Budget and forthcoming election have the potential to create economic instability if handled incorrectly, warned ICAEW chief executive Michael Izza this week. “The chancellor needs to make sure that anything he announces on the 24 March does not have an unintentional, adverse effect but instead is focussed on helping to get the recovery going again”, he said.
The accounting body has released its five point wishlist ahead of the Budget, outlined below.
No major tax changes for business
The Budget should not add to the regulatory burden for companies. The change in the VAT rate in the 2008 Pre-Budget Report caused implementation headaches for many small businesses at a time when they least needed it. The changes then had to be reverted a year later. The ICAEW wants no further complexity to be made to the tax system, when it is already over complicated.
Timelines confirmed for government schemes to help businesses plan
As confidence returns, businesses more than ever need to be able to plan ahead. At the moment it is very hard for them to do this without knowing how long government-assisted schemes will continue for. Companies do not know how long the Enterprise Guarantee Scheme will last for, nor when HMRC will become stricter on later payment of tax on the ‘Time to Pay’ facility. The ICAEW would like timelines, start points and end points to be confirmed on all schemes introduced to help the country’s businesses.
Manage public spending better to help tackle the deficit
While significant spending cuts may be necessary to tackle the public deficit, deeper problems exist with the financial management practices of government. Ministers, parliament and decision makers across the public sector lack information about what exactly was spent and how well it was spent. The ICAEW would like to see more transparency and scrutiny of projects to help encourage better efficiency.
Don’t unintentially damage UK competitiveness
As businesses globally come out of recession, many will be seeing it as a good time to review their products and markets. The chancellor needs to ensure that any new measures introduced in the budget do not damage the UK’s standing in the global marketplace, especially at a time when it is an attractive place to do business due to the exchange rate.
Be firmer in tackling the problems impacting on businesses’ ability to grow
Cash, working capital and funding are as important when growth returns as they were when the recession first hit. Although there has been improvement, access to finance continues to be an issue especially for small businesses. Banks are also increasingly reviewing terms for loans and raising fees and charges. The ICAEW would like to see greater consistency and transparency in the relationships between banks and companies and believes the government can assist this.
Do you agree with the ICAEW’s wishlist? What would you add to it? Share your thoughts below.
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