Commenting on the first Budget from a Labour government for 14 years, ACCA noted that while a commitment for greater stability in public finances is welcomed, including the alignment of economic strategy, a corporate tax roadmap and spending plans, it remains to be seen whether the announcements provide a much-needed boost to business confidence.
The changes announced continued the pattern of opaque changes to taxes, such as shifts to thresholds, to boost tax take in the short term, while avoiding long-overdue reform of our tax system, which will be necessary to create a long-term approach to investment and innovation.
Susan Love, ACCA's strategic engagement lead for Scotland said: 'Many of today’s announcements had been signalled well in advance, which helpfully avoided any unexpected shocks for businesses. Working with devolved governments to maximise opportunities from growth-enabling investment, such as energy transition, as well as in public services is welcome.
'However, to raise £40bn, the Chancellor has resorted to tax rises – most notably with the stiff increase in employers' national insurance – as well as a broad range of complicated tax tweaks. All these changes will impact business, with particular pressure on small businesses, especially in relation to employment costs, at a time when our latest economic conditions survey showed a decline in staff investment.
'Crucially, business confidence, critical to positive investment intentions, has been in short supply in recent months, and it may be that businesses in Scotland are unconvinced that all the bad news is out of the way, not least with the Scottish Budget still to come.
'Given the number of changes announced, it’ll be more important than ever for these businesses to seek the advice of their accountants; to ensure they comply with changes, as well as refocusing business growth plans.'
Glenn Collins, head of technical and strategic engagement at ACCA UK, added: 'The UK tax landscape is already too complex, and today’s announcements do little to address this. At a time when we need to see a longer-term approach to our tax system, to support investment, we have seen more short-term adjustments to raise revenue, adding yet more complication. ACCA has repeatedly called for the government to commit to a programme of tax simplification and it was disappointing not to hear more about that from the Chancellor today.
'Expectations were high ahead of today’s Budget. Ultimately it has left some questions unanswered, perhaps until the next phase of the spending review in spring 2025. Whether this will provide the clarity and certainty business needs remains to be seen.'
