Chartered Accountants Ireland has called Budget 2020 a reasonable effort to provide businesses with some certainty in key areas that would allow more effective business planning to be undertaken in these uncertain times.
Alan Gourley, Chairman of Chartered Accountants Ireland’s NI Tax Committee said:
“Businesses need more certainty. Today’s Budget was a bit of a mixed bag. There were positives in some areas for business, but other changes mean less certainty. There’s just under nine months now until the EU transition period is due to end on 31 December 2020. The business community cannot effectively plan for post 31 December trading arrangements with the EU because they simply do not know what these are.
“The Chancellor did extend the availability of postponed accounting for import VAT to post transition period trading arrangements, in whatever form these may take. This is a positive move and one that Chartered Accountants Ireland has been calling for.
“This means that VAT will not be immediately due at the point of import when buying from outside the UK but instead will be payable on the trader’s next VAT return when they will also be able to simultaneously claim relief for the VAT paid, in most cases.
“The cash flow benefits of not having to pay import VAT upfront cannot be underestimated. This has become even more critical in recent times as the spread of the coronavirus hits the global economy.
“However, entrepreneurs’ relief has been significantly curtailed from today. It’s disappointing that the Government did not take the opportunity to engage with the business community first and look at ways to make the relief more targeted whilst still allowing entrepreneurial activity to flourish.
“The Chancellor has also proceeded with his party’s previously announced promise not to reduce the corporation tax rate from 19% to 17% from 1 April 2020. This 2% reduction was announced some years ago and has actually been enacted in legislation.
“This change might only add £2,000 to the tax bill of a company with £100,000 in profits but the extra cost could make the difference to a business looking to invest in people or technology or simply to keep the doors open, particularly in difficult times.
The change in the rate not only costs companies more in tax, but it rams home the message that companies do not have certainty, and without certainty, key decisions can’t be taken.”
ENDS
Notes to editors
About Chartered Accountants Ireland
Chartered Accountants Ireland is Ireland’s largest and longest established professional body of accountants founded in 1888. The Institute, which is an all-island body, currently represents over 28,500 members around the world.
Reference:
Garry Webb, Chartered Accountants Ireland, phone 02890 435840/ 07841 152045
www.charteredaccountants.ie