Tax specialist warns Government is in danger of stifling entrepreneurs

Martin Gurney, tax partner at accountancy firm Haines Watts Swindon has warned the Government that hitting small business owners with more taxes could stifle the activity of the UK’s entrepreneurs.

He said: “The tax content was, yet again, fairly limited and mainly pre-leaked. Most of it was framed in terms of the reducing the Budget deficit, reducing borrowing and therefore any give-aways must be matched by extra revenue streams. Businesses are once again going to take a hit.”

The main tax points to be aware of are:

* Class 4 National Insurance main rate increased by 1% from April 2018 (i.e. to 10%) and by a further 1% from April 2019 – the maximum additional cost in 2018-19 will be c £350 per person.

* The dividend allowance, which was introduced in April 2017, is being reduced in April 2018 from £5,000 to £2,000.  For basic rate tax payers this is a cost of £225, for higher rate taxpayers £975.

Other points to consider are:

* There will be a first year cap of £50 per month on the increase in rates for businesses ceasing to qualify for Small Business Rate Relief.

* The requirement to report quarterly to HMRC under Making Tax Digital is being deferred by one year (to April 2019) for businesses and landlords whose turnover is below the VAT threshold (£83,000)

Martin said: “There were few surprises in the Budget for small businesses but owners need to plan for the extra taxes they will have to pay. They do need to work with their accountants and financial advisers to be tax efficient at a time when Government is still looking to balance the books in every small way possible and also seeks to penalise failure to comply and aggressive tax avoidance.”

“The Chancellor continues to express the desire to remove tax imbalances between different formats of business and address the inequality with taxes paid by employees.  My own view is that, if he fails to adequately incentivise and encourage small business, we may not see the growth in revenue and taxes that entrepreneurial activity would produce.”

Haines Watts Swindon is a firm of qualified Chartered Accountants and business advisors based in Old Town. They offer a variety of accountancy and tax planning services to owner-managed businesses, charities and not-for-profit organisations  across the south west. The firm is part of the national Haines Watts network of offices. For further details visit www.haineswatts-swindon.co.uk

Pictured above: Martin Gurney of Haines Watts Swindon

You must be logged in to post a comment Login