A tax expert at a Warwickshire accountancy firm says business owners in the region are concerned about further potential changes being announced in the Spring Budget.
Phil Stevens, Head of Tax at leading regional accountancy firm Burgis & Bullock, says that businesses across the region are concerned about rising costs and tax liabilities, but expects there will be little to no support offered by the Government in the upcoming fiscal statement.
Chancellor Jeremy Hunt will deliver the Spring Budget on Wednesday, March 15 and it is expected to focus on measures to support the Government’s economic growth plan and its four pillars of education, enterprise, employment and everywhere.
It comes as businesses throughout the country wrestle with rising costs and prepare for increases in tax, with the major change coming in within weeks when corporation tax rises to 25 per cent on April 1.
The Government is also continuing with tightening its research and development tax regime through HMRC and the capital allowance super deduction on new plant and machinery expenditure comes to a close at the end of this month.
Phil Stevens, who leads the tax advisory team at Burgis & Bullock, which has offices in Leamington, Nuneaton, Rugby and Stratford-upon-Avon, says that he isn’t expecting significant support for businesses in the Budget.
He also believes that more people will be considering selling or winding up their businesses to avoid being impacted by capital gains tax changes, with that decision also being impacted by the potential political change in Government.
Phil said: “The landscape is really tough for businesses at the moment and worryingly we don’t expect there to be much improvement following the Spring Budget.
“There have been calls for the increase in corporation tax to be delayed and that would be a very positive step, as a six per cent increase in the top rate is sizeable. This will have a real impact on companies and will affect those with profits of £50,000 or more, although this level could be even lower if the company is also impacted on the revised associated company rules being implemented from April 2023.
“It is likely that a number of consultations will be announced, but not any major changes that apply straight away. There is likely to be news around replacing the capital allowances regime, changes to the research and development scheme and then also possibly some details around environmentally friendly tax measures.
“Entrepreneurs I speak to are worried about the rise in Capital Gains Tax from the existing rates, and we have spoken to a number of individuals about whether this is the right time to sell or wind up their business.
“The big concern continues to be Capital Gains Tax being aligned with income tax, or somewhere near to those levels. There are also businesses starting to consider the political implications of a new Government, and whether they should sell before potential higher tax rates or reductions in relief are introduced.
“Clients are certainly concerned about the future. Stability is still the key word for all businesses, and it will be interesting to see what the Government announces to help promote stability for UK businesses.”
