Accountants’ body calls for a ‘bombshell free’ Autumn Statement
The Institute for Chartered Accountants in England and Wales (ICAEW) has called for Chancellor George Osborne to deliver an Autumn Statement with no new surprises for businesses.
The organisation said that businesses were still getting to grips with a number of measures included in Osborne’s summer Budget in July. These included the introduction of the Living Wage, which will be introduced starting in April 2016 for workers aged 25 and over.
Businesses of all sizes are also facing increases in Insurance Premium Tax. Additionally, bigger companies will be faced with an apprenticeship levy, which is expected to come into force in 2017.
Stephen Ibbotson, the ICAEW’s director of business, has suggested that the Chancellor should be wary of introducing new methods that may impact on businesses. He added that a large proportion of firms are unsure of what benefits the changes from the summer have brought to the table, while some have even altered their recruitment processes in direct relation to the introduction of the Living Wage.
A poll of 500 of its members carried out by the ICAEW found that more than half (56%) expected the rise in Insurance Premium Tax to have a negative impact on their businesses. Some 28% said the change from the Minimum Wage to the Living Wage would have the biggest negative impact and 12% cited the apprenticeship levy.
A large number of respondents said they did not believe that a proposed drop in corporation tax – scheduled to fall from 28% to 19% by 2017 – would make up for the combined negative effects already introduced. The results highlight the need for good financial management among smaller firms, as those that fail to plan effectively and keep an eye on their spending may be left in need of corporate recovery methods. Assistance from UK insolvency practitioners should be sought at the first signs of financial trouble where possible.
Mr Ibbotson added that the majority of businesses are in agreement that the negative implications from measures introduced in July cannot be offset by a reduction in corporation tax. He explained that keeping the Autumn Statement simple will allow firms to confidently plan for the longer term, meaning they should be better placed to tackle issues in the future.
By Phil Smith