The Government has a lot of work to do to stick to its promise of abolishing the paper end-of-year tax returns for the self-employed, experts said today.
The Chancellor announced he was scrapping paper returns in favour of real-time digital accounts.
Lower business taxes, improved allowances for investment, and targeted support for sectors, regions and small companies all contribute to business confidence, investment and job creation.Babs Murphy - Chief executive of the North & Western Lancashire Chamber of Commerce
Anthony Cox, tax director for KPMG in Preston, commented: “This should, in theory, prompt cheers up and down the country, with none louder than those coming from the approximately five million self-assessing taxpayers who run their own businesses.
“However, if it’s going to be a truly reduced burden, then information will probably need to be drawn directly from accounting systems. That’s a massive technological challenge for HMRC to achieve in a relatively short space of time.”
He added: “Owner managers have long called for an end to the seemingly endless amount of form-filling and compliance with onerous red tape that typically comes with running your own business. Indeed, our own recent survey of the UK’s small and medium-sized businesses indicates that almost half of all business owners spend at least one day a week on basic administrative tasks.
“Anything which reduces this perceived ‘dead time’, allowing entrepreneurs to focus on the running and growing of their business will ultimately help drive economic growth, spur job creation and increase the competitiveness of the UK. So we want to see HMRC deliver on Mr Osborne’s ambitions for them.
“The good news is that many small businesses are already embracing innovations in digital technology to support their financial reporting, such as the use of cloud-based accounting services and digital receipt banking, so this should be an easy transition for them. But will it be as easy for HMRC?”
Babs Murphy, chief executive of the North & Western Lancashire Chamber of Commerce, said: “The Budget identifies short-term electoral horizons and long-term economic needs.
“The Chancellor’s attention on business growth and success will receive a broad welcome from our local business community.
“Businesses not only want more sustainable public finances, and they also want the government to take practical steps to support growth. It appears that the Chancellor has pulled off a difficult balancing act, whilst maintaining fiscal discipline, he is ensuring that necessary deficit reduction doesn’t undermine the UK’s growth prospects.
“Lower business taxes, improved allowances for investment, and targeted support for sectors, regions and small companies all contribute to business confidence, investment and job creation.
“Yet the Chancellor avoided the temptation to use new-found windfalls for gimmicks. His focus on fiscal responsibility will play well with business audiences.”
Meanwhile, the Chancellor gave some cheer to the licensed trade with a 1p cut in beer duty for the third year in a row.
Malcolm Ireland, head of leisure and licensing at law firm Napthens, welcomed the news.
He said: “We have already seen two years of successive cuts to beer duty help improve confidence and spur investment in the licensed trade.
“The British Beer and Pub Association is predicting that a third year of cuts will help create almost 4,000 jobs for the sector, and I welcome this news.
“Tireless campaigning from the licensed trade seems to have worked, with the Government recognising the important part the sector plays in our economy, contributing billions to GDP and supporting hundreds of thousands of jobs. With the beer tax escalator removed in 2013, together with three years of cuts to beer duty, the licensed trade is looking healthy and we have the environment we need to build on this for the future.”