- Little in the way of immediate support for small and medium sized businesses to enable them to thrive
- Some individual taxpayers will see more in their pockets as a result of the planned reductions in national insurance contributions
- Plans to tackle the unfairness in the child benefit tax charge is a positive start; but removing the cap on Tax Free Childcare would have been welcomed by working families
Today’s (6 March) Spring Statement was a missed opportunity to provide businesses with tax incentives and supports which would allow them to grow and thrive, according to Chartered Accountants Ireland. The Institute, which represents almost 5,000 members in Northern Ireland, more than two thirds of whom work in business, made these remarks as Chancellor Jeremy Hunt delivered his Spring Statement in Westminster earlier today.
Commenting, Janette Burns, Chair of the Northern Ireland Tax Committee of Chartered Accountants Ireland said: “Despite the difficult fiscal backdrop, the Chancellor had an opportunity today to signal more support for businesses in Northern Ireland.
"While the announcement that HMRC will establish an expert panel to ease the difficulties when claiming R&D tax reliefs is welcome and full expensing will extend to leased assets, we would have liked to have seen more targeted supports perhaps in the way of a VAT cut for the hospitality sector for example.
"For businesses in Northern Ireland, while we recognise the new Executive has a long list of pressing issues, we recommend, at a minimum, an open dialogue begins on the possibility of the region using its powers to reduce the rate of corporation tax.”
“Like the Autumn Statement, today’s Spring Budget was made with a general election looming. A reduction in national insurance from 10% to 8% means the average worker will be better off but by less than £10 per week. A more positive move might have been to unfreeze the income tax thresholds to stop more workers being dragged into higher tax brackets.”
Raising the threshold at which the High-Income Child Benefit Charge is applied to £60,000 from April as well as a plan to move to a household-based system by April 2026 were cautiously welcomed by the Institute. However, it was disappointing not to see the removal of the cap on Tax Free Childcare.
Commenting, Paul Millar, Chair of Chartered Accountant Ireland’s Ulster Society: “Recent studies by the Institute show that a staggering 75 percent of surveyed members cite cost as the primary barrier to accessing suitable childcare. While the extensions to the high-income child benefit charge are a positive signal of the government’s commitment to improving the childcare system, removing the cap on Tax Free Childcare would have had a more extensive impact.
"Currently, tax relief is only granted at 20% on childcare costs of up to £10,000 per child per year. Given that on average parents pay between £1,000 and £2,000 per month per child for care, abolishing the cap would instantly put more money back into the pockets of parents and increase the attractiveness of remaining in the workplace.”
LOADING...