ACCA responds to George Osborne’s summer Budget

The Chancellor has not been as brave as he could have been, says Chas Roy-Chowdhury, ACCA (the Association of Chartered Certified Accountants) head of taxation, in response to today’s Budget.

Chas Roy-Chowdhury, ACCA head of taxation, commented:

Inheritance Tax

“The Chancellor should have been bolder in his first Budget in a Conservative majority government. The change to inheritance tax is a positive step, although he could have just removed the primary residence from the scope of the tax entirely. This would have made it a level playing field for all. He has introduced a highly complex system of relief tapers and carry forwards.

Living Wage

“We welcome that he took the opportunity to incentivise employers across the UK including Northern Ireland to pay the living wage. During the election campaign he and the Prime Minister spoke about raising wages for all but a commitment to eventually raising the minimum wage. This is the right direction at £9 per hour and increasing the NIC relief to £3,000.

Corporation Tax

“We welcome the Chancellor’s commitment to supporting business growth with a reduction in corporation tax however this could go even further in Northern Ireland with the recent legislation for the devolution of corporation tax now passed the House of Lords. It is crucial that Northern Ireland political parties continue to work together to honour the Stormont House Agreement and make this legislation a reality for Northern Ireland businesses.

Fiscal Drag

“We welcome the rise in the 40% tax threshold, something the Chancellor has wanted for some time. Over the past five years, he has restricted the personal allowance increase to basic rate taxpayers and on many occasions lowered the level at which the 40% rate came in. If this change had been delayed much longer we would be in the situation where 40% had, in effect, become the basic rate. The rise to £43,000 by next April will come is a move in the right direction.

Pensions

“We are disappointed with the Chancellor’s decision to restrict pension tax relief at higher incomes. This constant tinkering and toying with people’s life-time plans is the wrong approach. This policy is at odds with both his and the Prime Minister’s claims that they want to create ‘a nation of savers’. By restricting relief you are limiting the attractiveness of saving for the future as well as tinkering with people’s long-term plans. This is a short-term tax grab that will have long term detrimental effects.

Non-domiciles

“The proposed changes to the non-domicile status are a fair change to a system that was never intended to give high-net worth individual’s permanent tax relief. It is entirely sensible to scrap the status for those who have lived in the UK including Northern Ireland for 15 out of the last 20 years.”

ENDs

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Notes to Editors

About ACCAACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 170,000 members and 436,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 92 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com