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Research and development tax relief
R&D scheme is globally competitive, but administrative burdens to be reduced
“Good news on the R&D regime,” said Helena Kanczula, Director at Blick Rothenberg, “a move to reduce the administrative burden will encourage more businesses to claim this valuable relief.”
Research and development tax relief
R&D scheme is globally competitive, but administrative burdens to be reduced
“Good news on the R&D regime,” said Helena Kanczula, Director at Blick Rothenberg, “a move to reduce the administrative burden will encourage more businesses to claim this valuable relief.”
“We would welcome any simplification in the paperwork around reliefs such as they R&D tax credits as long as this isn't transferred to more queries raised by HMRC. We should be making tax compliance, and legislation, as simple as possible and there is some way to go,” said Jim Brown, partner at Blick Rothenberg and Director of Global Business Services.
Digital tax
Quarterly reporting for businesses below the VAT threshold will be deferred for 12 months.
Business rates
There is scope to reform the revaluation process. Three proposals:
- Any business coming out of small business rate relief will have a capped increase
- Public houses will have a £1,000 discount rateable value of less than £100,000 (90% of all pubs)
- A fund for local authorities to receive a fund to provide discretionary relief
“Why do all governments not think through changes that affect businesses? Having announced the proposed changes to business rates and now announcing certain reliefs only leads for more confusion. The size of the businesses impacted do not have the support to understand all these changes. IT is time governments thought policy rather than focusing on the fiscal measures,” said Nilesh Shah, CEO of leading accounting, tax and advisory practice Blick Rothenberg.
Robert Pullen, Senior Manager at Blick Rothenberg, commented: “Good news that the Chancellor is taking action to smooth some of the business rate impact, but many will argue he has not gone far enough. It would have been more welcomed to smooth all of the increases, rather than those businesses coming out of the small business rate relief
Tax collection
Robust action to tackle avoidance have meant UK has one of the lowest tax gaps in the world. Further action:
- Stop conversion of losses.
- Tackle abuse of foreign pension schemes.
- UK VAT on roaming telecoms outside the EU.
- Financial penalty on professionals for defeated tax avoidance schemes.
Employment status
The chancellor confirmed that 'the broadest shoulders bear the heaviest burden', mentioning that the top 1% of taxpayers pay 27% of income tax. He wanted to see more fairness between individuals and noted the dramatic increase in self-employed and those working through their own companies. However, choice in work should not be driven by tax. The chancellor looks forward to the Matthew Taylor report in the summer.
The NIC difference between employees and the self-employed are substantial. Historically, this has reflected benefit differences, but these have been and are being reduced – eg state pension and parental benefits (this will be addressed).
The difference in NIC is no longer justified and the abolition of Class 2 NIC will further increase the gap.
From April 2018, the main rate of Class 4 will increase to 10% and 11% in 2019.
There is also a difference between employees and those working through a limited company. The £5,000 dividend allowance has increased this benefit and will reduce to £2,000 in 2018.
