ACCOUNTANTS ISSUE 5-POINT WISH-LIST FOR OSBORNE'S SPRING BUDGET

Top 40 accountants Bishop Fleming has issued a 5-point wish-list for the Chancellor's Spring Budget to be delivered on 16^thMarch.

Matthew Lee, Managing Partner at Bishop Fleming, said: "The Spring Budget is an opportunity to help individuals acknowledge the importance of owner-managed businesses to the UK economy and to make the tax system simpler. Red tape and burdensome tax policies need to be reduced, not increased. Here are 5 items the Chancellor should announce."

1. Dividend taxation:The new dividend tax regime starting from April 2016 will unfairly penalise the majority of owner-managed businesses in this country who contribute substantially to the UK economy. It is a tax on income that has already been taxed. To soften the blow, the rates of this new tax should be lower than those proposed and with a larger dividend threshold before the tax starts. An unintended consequence of the new rules is the adverse effect on the charity sector; this needs to be addressed to avoid the voluntary sector and those who donate also losing out.

2. Pension tax reform:The much-rumoured fundamental reforms to pension tax relief, whereby such relief is withdrawn or substantially reduced, will, if implemented, have an adverse effect on the long-term savings of individuals. Tax relief for investing in a pension scheme is an important incentive for people to save for their retirement. Changing the rules so that there is little incentive to save is reckless and counter-productive to the government's wish that people invest in their futures.

3. Halt on new employer legislation:This coming April will see employers having to deal with new payroll rules on employee benefits and the new National Living Wage. This is on top of many small employers now having to set up pension schemes under Auto-Enrolment. There needs to be a brake on new laws affecting employers in recognition of the heavy burden that has already been placed on them this year from recent changes in the law.

4. Marriage allowance fairness:Only around one in ten eligible couples have reportedly so far applied for the new marriage allowance which started in April 2015. The tax break allows low earning couples to transfer a fixed percentage of personal allowances between each other to avoid them being wasted. The maximum possible tax saving of £212 is not available at all where, for example, one spouse has no income and the other pays tax at the higher-rate. The government needs to raise awareness of the allowance, make it easier to claim, and make it more flexible to allow a greater proportion of personal allowances to be transferred.

5. Inheritance Tax (IHT) fairness:The proposed phased introduction from April 2017 of the new residence nil-rate band for IHT to £1m for couples is very welcome, but it would be much simpler if this was also available against other assets and not just the family home. The planned rules are unnecessarily complex, particularly as regards homeowners wishing to downsize their main property before passing it on. Having just one IHT threshold would reduce record keeping as well as the ensuing compliance burden.

Matthew Lee said: "The Chancellor has already acknowledged that the UK has one of the most complex tax codes in the world and needs to be simplified. When he took office in 2010 George Osborne claimed it was his hope that people would eventually be able to understand the tax laws by which they were governed. So far he has been responsible for increasing the complexity by quite a margin, with many laws rushed through without proper consultation."

"George Osborne has the opportunity - on 16 March - to deliver a Budget that can make a real difference to Britain's business environment and reverse his unwelcome policies in these areas. This last Budget introduced proposed changes targeted at the heart of the entrepreneurs who are key drivers of the UK economy. Assaults on pensions, dividends and buy to let property ownership are devastating and counterproductive", said Mr Lee.

END
 

PHOTOGRAPH: Hi-res Matthew Lee Matthew Lee, Managing Partner, Bishop Fleming

FURTHER INFORMATION:

• Matthew Lee:mlee@bishopfleming.co.ukor 0117 9100 250

• Julian Cramp:jcramp@bishopfleming.co.ukor 01392 448800

NOTES TO EDITOR:

• Bishop Fleming is a UK Top 40 firm of accountants with offices in Worcester, Bristol, Bath, Exeter, Torquay, Plymouth and Truro.

• Bishop Fleming has been listed in the Sunday Times Top 100 Employers in the UK.

• Bishop Fleming was shortlisted for "Top 50 Tax Team of the Year" in the British Accountancy Awards 2015.

• Bishop Fleming was highly commended for the "Mid-Tier firm of the Year" in the British Accountancy Awards 2015.

• Bishop Fleming won accreditation as an "Outstanding Investor in Clients" (Investors in Customers) in 2015.

• Bishop Fleming was listed as one of the 4 "Best Employers" by Accountancy Age in 2013.

• Bishop Fleming was the first UK accountancy firm to win "Investors in People" accreditation (and has secured re-accreditation ever since).

• Bishop Fleming is a member of Kreston International, a network of independent accounting firms in more than 100 countries.

• The firm focuses on serving and championing owner managed businesses and has sector teams specialising in:

• Academy Schools

• Charities, Schools, and not-for-profit

• Healthcare including Care Homes, Dentists and doctors

• Hotels, Leisure & Tourism

• Manufacturing Technology and Innovation

• Renewable energy

• Property & Construction

• Media & Creative

• Professional Practices.

• Bishop Fleming is unusual in having:

• A full-service payroll operation

• An independent financial advisory service (IFA)

• Tax Partners with international experience

• A VAT Director and a Technical Tax Manager.