A Top 20 accountancy firm has published its ‘wish list’ for the upcoming 2013 Budget – including a reduction in the main Corporation Tax rate, more certainty in the tax system, and an intelligent debate on any potential ‘wealth tax’.
Wish list for business tax measures
RSM Tenon’s Paul Belsman said that he expected to see a “strong enforcement element’ in the Budget, and even more action against tax avoidance, especially following the headlines following revelations that companies like Starbucks and Rolls Royce pay hardly any corporate tax in the UK.
The firm welcomed the forthcoming implementation of the Patent Box, which provides Corporation Tax relief on income derived from patented inventions, alongside the relaxation of some Research & Development (R&D) tax relief rules.
Belsman said that he would like to have confirmation that both Corporation Tax rates (the main rate and small companies’ rate) would finally converge at 20%, the continuation of the £250,000 Annual Investment Allowance (AIA) limit, more measures to address the funding gap – especially for smaller firms, and more certainty in the tax system.
Wish list for individual tax measures
For individuals, Belsman said there was no doubt that the overall tax burden had increased over the past year, alongside more complexity (see the Child Benefit changes as one headline-grabbing example).
The accountancy firm’s wish list for individual taxation includes a debate on wealth tax… “the proposed tax on Mansions, whilst an easy target, lacks all the ingredients of proportionality. We would like to see a proper assessment of the value of an individual’s wealth, rather than target one asset class that frequently can represent a distorted position particularly if there are significant borrowings in place. ”
Belsman also hopes the Government will deliver a u-turn on the proposed limits to pension contributions that are due to take place from April 2014, more encouragement for savers, and an increase in the personal relief to £10,000 in 2014.
The anomaly in the Child Benefit changes which took effect earlier in the year also need to be addressed. Under the current system, a family where both partners earn £49,000 each per year can keep their full CB entitlement, but a family where one partner earns just £60,000 does not qualify for any benefit.
Budget 2013 coverage on Bytestart
We will provide full coverage of the 2013 Budget here on Bytestart, together with expert analysis following George Osborne’s speech on 20th March.