Tax experts have highlighted access to finance, stability and certainty in the tax system as the main concerns for Midlands enterprise in tomorrow’s Budget.
PricewaterhouseCoopers (PwC) in the Midlands said one of the leading questions for Government on access to finance is working out which barriers are short-term problems brought about by the credit crunch, and which could limit the growth potential of businesses in the longer term.
Head of tax Barry Smith said the Chancellor will have another opportunity to create a strong business environment.
He said: “There have been numerous new measures announced over the last 12-18 months and a number of reviews of what more needs to be done. Clarity around what’s going to make the real difference to businesses at the coal face is now needed.”
“The Chancellor should be considering questions right now about whether an extension of the EFG (Enterprise Finance Guarantee) to non-bank lenders could make an even bigger difference in the short-term. For the longer term, ensuring success of the UK Innovation Investment Fund is crucial.”
Mr Smith said it was unlikely Alistair Darling would be announcing many new incentives for enterprise, such as R&D tax credits, enterprise management incentives and venture capital trusts.
He expects a tightening of the rules at HM Treasury and HM Revenue & Customs.
He added: “The plea to Government from Midlands enterprise is that any tightening of rules for incentives continues to be done through consultation to avoid unintended and damaging impact.”
“Turning to stability and certainty in the tax system, Government has taken an important step in publishing, in February, its draft Tax Framework for Business. The six principles this is based on, which include stability and competitiveness, are the key. On the implementation of the Tax Framework for business, Barry Smith said:
“Actions speak far louder than words and the request to Government would be that the principles of the new Framework are followed, starting from the Chancellor’s Budget statement on Wednesday.
“Stability and certainty create an environment where businesses can make confident strategic choices and this is crucial if the UK is to be fiscally competitive and attractive to incoming entrepreneurial investment.”