ICAS responds to Budget 2015
ICAS – the professional body for chartered accountants – has today responded to key announcements in the Chancellor George Osborne's 2015 Budget.
The Chief Executive of ICAS, Anton Colella, responding to today's Budget, said: "This draws the battle lines for the election. On the one side, the claim of national recovery and growing prosperity and on the other the claim of more austerity and a Government ignoring real people's lives.
"On the whole it seems a good Budget for business but the people will decide at the ballot box whether it's done enough for them."
Abolition of tax returns
On tax returns, Charlotte Barbour, ICAS Head of Taxation said:
"Enormous resources have been put into digitising HMRC processes in recent years and it is sensible to set out a longer-term vision of where this will lead – for the public and for HMRC.
"Whilst we welcome the effective use of digital services, there is a risk that this could lead to the exclusion of those who are unable to use this delivery mechanism – the elderly, vulnerable and poor may not always a have adequate resources or inclination to file online. ICAS does not support mandatory 'online everything' in the tax system. There is also further work required around ensuring digital security and proper access to broadband facilities for all.
"The UK tax system remains notoriously complicated and there remains a need for professional tax agents to assist in this process."
On savings income, Charlotte Barbour, ICAS Head of Taxation, said:
"In practical terms, this is a simplification for most taxpayers with savings, particularly the devolution of the taxation of earned income. However, it does introduce another exception into the tax system and ICAS would prefer a more holistic review of taxation of income and savings."
On tax avoidance, Elspeth Orcharton, ICAS Director of Taxation, said:
"ICAS looks forward to the Chief Secretary's announcement of action to tackle tax evasion."
"HMRC already has a full toolbox of powers to use against abusive tax avoidance and should use them on a more targeted and effective basis against the small minority. The vast majority of tax advisers in the country aren't involved in this, and should not be burdened by more red tape when they are actually key to making the incredibly complex UK tax system work.
"Whilst the debate is around legal tax avoidance, it should not be forgotten that illegal tax evasion costs the country billions of pounds more each year in lost tax.
On international tax, Elspeth Orcharton, ICAS Director of Taxation, said:
"ICAS agrees that legislation and international action is needed to address the gaps in the international tax system. It will be interesting to see how the next UK government engages with the OECD recommendations on modernising international tax cooperation, particularly if the UK might not gain much tax yield or might lose tax competitiveness – this is only a small step on that journey.
"Education is also needed – the public deserves clear explanation of business realities, tax compliance levels, and current practices."
On annuities, Christine Scott, ICAS Assistant Director of Charities and Pensions said:
"Pensioners will be allowed to sell their annuities from April 2016. While this may be attractive to some annuitants, a decision to sell an annuity should not be taken lightly or without a clear view of the risks involved and the costs and the tax consequences of the transaction. At the very least, the role of Pension Wise – the government service that provides information about new pension options - should be extended to cover this additional pension freedom in time for the implementation date."
Personal tax allowances
On personal tax allowances, Elspeth Orcharton, ICAS Director of Taxation said:
"We agree that what the country's tax system needs is longer term planning and real commitment to simplification. Setting out staged increases in personal allowances is one way to do this, and it will put money direct into the pockets of many taxpayers."