Budget – What are interested parties asking for?

Ahead of the Budget on 30 October 2024, Nicola Holcombe takes a look at what some of the professional membership bodies and other groups are requesting from the Government. Topics include changes to incorporation relief, tax simplification and business rates reform.

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Transcript

[00:00:00] Hi everyone, this is Nicola Holcombe, Tax Content Writer and Presenter here at Nursia. With the budget next week, it might be useful just to take a few minutes to review what some of the main governing bodies have to say about what they would like to see addressed next week. And look first of all at the tax bodies.

[00:00:20] The Chartered Institute of Taxation, CIOT. Has said that they would like the government to address the imbalance on interest on tax repayments payable by HMRC when compared to those charged on the tax payments. This is currently tipped in favour of HMRC, and fairly so, and CIOT believes that it's not conducive to encourage timely or even early payments by taxpayers.

[00:00:49] So, that's one of the first things they'd like to see addressed. Probably more than this though, they are mainly seeking reform of section 162 of the TCGA's incorporation relief. That's a relief when incorporating a sole trader business. And in particular, they're calling for the requirement, the whole of the business's assets save for cash be transferred.

[00:01:16] They believe flexibility to choose when to withhold certain assets on incorporation would be welcomed by business owners. And additionally, they're also seeking clarity on whether or not the transfer requires transferring legal title. Or just beneficial title, as is the case for a number of other reliefs.

[00:01:38] So that's the two key proposals from CIOT. If we move on to the Association of Tax Technicians or ATT their focus has been primarily on tax simplification. First of all, they would like to see the opt in for income tax self assessment maintained. So that's for those who do not ordinarily have to report.

[00:02:01] They would like to see that option to include themselves within the self assessment system maintained within the rules. They would also like to see an alignment of the rules for spouses and civil partners who own property jointly, and that alignment being with the rules that apply to other joint property owners for income tax purposes.

[00:02:25] They hope that this would potentially ease any complications or detrimental effects that could be felt when the furnished holiday lettings regime is abolished next year. Additionally the ATT would like to see a relaxation of the rules on carrying back of gift aid donations to prior years. And they'd also like any income that is covered by the savings or dividend allowances to be excluded when calculating an individual's adjusted net income in the same way that it is for any income covered by the property or trading allowances.

[00:03:05] And finally, for ATT, they have some other minor representations, which include The extension of IHT loss relief on shares from 18 months to 24 months for executors. They'd also like to see an increase in mileage allowances. They haven't moved for quite some time now, and they'd like an increase to reflect the recent increases in cost of living.

[00:03:32] And finally, they also would like the trivial benefit rules for employers. To be increased from the current 50 pound limits. So that's the tax bodies. Finally, also still within tax is the low income tax reform group. And they have specifically stated that they would like to see more guidance for those selling on online platforms.

[00:03:58] And in particular, in relation to reporting obligations and tax exposure, as they feel that this is an area. That taxpayers in general don't know an awful lot about. If we then move on to the Institute for Chartered Accountants of England and Wales, the ICA, their focus is primarily on helping businesses.

[00:04:19] They would like to see further investment in businesses encouraged. Generally, but in specific terms, they are calling for full expensing to be extended to leased assets as was originally announced, but hasn't yet been enacted. They would also like to see a reform of business rates and further tax reliefs to be put into place for employers offering employee health services.

[00:04:50] So they feel all of those would. Help businesses generally and encourage investments and hence improve the economy. And finally, moving on to the British Chambers of Commerce, they have focused unsurprisingly again on businesses and what can be done to help. They have called for a business tax roadmap that will provide greater certainty for businesses.

[00:05:18] And within that, they have included a request for the reform of VAT. Business rates and changes to the employee status rules. They'd also like to see some government assistance with the transition to net zero, whether that be in terms of capital expenditure. Or general upskilling. They also would like to see assistance with business investment in general and upskilling of the workforce in general, as they feel this will help the economy.

[00:05:50] They have also called for tax reliefs for capital expenditure that doesn't qualify currently for any capital allowances. And finally, they are looking to the government to ensure that research and development relief remains cost effective for small and medium sized businesses, given the recent changes.

[00:06:10] That's our quick review of what the main bodies are calling for next week in the budget. Other than that's all for me, but just to remind you that Mercia will be providing our usual budget support services, and these will include our summaries and rapid reactions. But from me, that's all, and thank you for listening.

[00:06:30] Thank you for listening to the Mercia podcast. For more information on this topic, please visit mercia group. com