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ICAEW calls for tax simplification

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ICAEW has warned the chancellor and business secretary that the government plans to tackle red tape and reduce costs to business by £10bn will fail unless they take steps to tackle the complexity and length of the tax code. The ICAEW says that reducing the time small businesses spend on tax issues and trying to liaise with HMRC will free up time to concentrate on growing their business and improve exports; further observing that the UK has one of the longest and most complex tax systems in the world and that two of the three longest Finance Acts ever were enacted in the last parliament. ICAEW wants the ‘one in, two out’ principle for regulation to also apply to tax law.

The ICAEW has also said that in next month’s post-election Budget it wants the independent Office of Tax Simplification (OTS) to be given the resource it needs to deliver on tax simplification and deregulation.

Michael Izza, ICAEW chief executive, said: ‘Businesses need certainty and at the moment “UK plc” is currently hedging their bets on whether to invest. It is now time to confirm a long term rate of the annual investment allowance (AIA). Reaffirming the rate at £500,000 will provide stability and consistency to firms that like to plan and invest for the long term, and would kick-start the kind of investment needed to enable businesses to thrive.’

Other suggestions by ICAEW include allowing smaller employers up to 50 employees to make fewer RTI reports and payments, simplifying the auto-enrolment process for employers with up to 25 employees and including NIC exemptions for apprentices. The chancellor will deliver his post-election Budget on Wednesday 8 July.