Tax reform must not short-change businesses

Alun Oliver
Alun Oliver

Property tax specialists in Dorset are urging the government to ‘keep it simple’ as consultation opens on a proposed shake-up of investment allowances this summer.
E3 Consulting – with an office in Bournemouth – has called for a reduction in red tape and warned that businesses must be given time to adjust to any changes.


It comes as HM Treasury launches the consultation with a policy paper inviting views about potential reforms to capital allowances – tax reliefs available to firms and individuals investing money in a business.


Chancellor Rishi Sunak opened the consultation on May 9, with responses required by July 1 before final plans are due to be announced in the Autumn Budget.
In addition to reforms to boost investment, the Government is seeking to understand the decision-making process and impact tax reliefs and similar fiscal incentives have on investment choices that businesses face.


E3 Consulting, founded in 2003, specialises in property related taxes, such as Capital Allowances, Community Infrastructure Levy (CIL) and Land Remediation Tax Relief.


Managing director Alun Oliver and property tax surveyor Todd Arnison flagged up the imminent consultation in E3’s latest webinar, which focused on capital allowances in property and real estate purchases.


Alun said afterwards: “The tax system is already mightily complicated for some businesses.


“It is encouraging to see the Chancellor consider improvements but tax reform has a chequered history and he must ensure any new initiatives are not counter-productive.


“If he really wants to modify behaviour and encourage businesses and individuals to invest, he needs to give them enough time to get to grips with any new measures.


“For example, the 130% super-deduction capital allowance is a super complicated relief which is due to end in March of next year, just two years after it was introduced. It will have gone by in a flash.


“With tax legislation being built up in layers over many years, and by all sides of party politics, there is plenty of scope for clarification, rationalisation and enhanced realistic timescales of up to ten years in these reforms to encourage greater utilisation of the available reliefs to achieve the boost in investment and economic prosperity that the government wishes to see.”


Under the capital allowances system, businesses can write off up to 100% of their costs of qualifying expenditure over time in different ways, saving tax and boosting return on investment and cashflow.   As well as Bournemouth, E3 also has offices in Southampton and London.


For more information contact E3 Consulting on 0345 230 6450
•    See the full consultation document here: https://www.gov.uk/government/publications/potential-reforms-to-uks-capital-allowance-regime-inviting-views/potential-reforms-to-uks-capital-allowance-regime-inviting-views

 

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