CIOT warns on Finance Bill changes

The Chartered Institute of Taxation (CIOT) has rounded on the government for what it regards as ‘constant tinkering’ with tax rates and allowances.

The institute said the actions ‘undermine the consistency and predictability that taxpayers and businesses crave – and risk reducing international competitiveness’ even when the intentions are to increase it. The warning comes as several changes to allowances for business are working their way through parliament in the Finance Bill.

These include reducing from 8% to 6% the capital allowances special rate for qualifying plant and machinery assets. The new rate still gives tax relief for investment in these assets but over a longer period. The CIOT said: ‘Inevitably this will [have an] impact [on] the return on investments already made in the period when the old higher rates of allowance were in force.’ It has also drawn attention to the frequency of changes to...