smallbusiness.co.uk: Helping your business think big

With Chancellor Gordon Brown due to make his Budget speech to the House of Commons on 21 March, it will be interesting to see how he approaches the task, bearing in mind that it’s widely believed to be his last.

Chas Roy-Chowdhury, head of tax at the Association of Chartered certified Accountants (ACCA), believes it is a chance for Gordon Brown to make a lasting impression on the UK’s tax system, not only for individual tax-payers but also for small, medium and large businesses.

SmallBusiness.co.uk, and Roy-Chowdhury have these insights for SMEs for the forthcoming Budget, what to expect and what the ACCA thinks is needed:

- Feedback from ACCA tax experts reveals that individuals and businesses find their tax burden unacceptable. In previous Budgets, the Government claims it has made efforts to provide the best possible environment for enterprises to thrive, from streamlining the number of regulatory bodies and rationalising business support to reforming the Small Firms Loan Guarantee, but the sector is still concerned about the cost of regulatory compliance and the level of tax placed upon them.

- Green issues are now front-page news and SMEs have an important role to play in the ‘greening’ of the UK. Were the Chancellor to include green incentives for SMEs in the Budget, the tax breaks offered would change how businesses are run, from the use of incandescent light bulbs used in offices to how waste is sorted and collected.

- For bigger businesses, the ACCA believes corporation tax should become more competitive. Compared to other rates in Europe, the UK’s 19 per cent or 30 per cent rates (depending on turnover) are some of the least attractive in Europe and can make cross-border business transactions more difficult.

- Small business rate relief also needs to be extended, says the ACCA. ‘Its introduction in Scotland and England doesn’t go far enough, so ACCA is calling for its expansion into Wales and Northern Ireland so that it becomes a truly UK-wide scheme.’ Current take-up of this scheme in England has been slow, but in Scotland take-up rates of 90 per cent have been seen.

- We could see HM Revenue & Customs (HMRC) becoming more consultative with SMEs - put simply, the taxman could become less punishing. With the inevitable introduction of online filing from HMRC, the ACCA is calling for a less penalty-driven system that takes into account the costs incurred for businesses that have to adapt to the taxman’s regime.

Over 99 per cent of businesses in the UK are small businesses. For them to continue to thrive and grow, a low tax competitive environment is a must, says the ACCA.

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