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19 Nov 2013 06:10pm

ICAEW urges Osborne to cut VAT

ICAEW has called on the chancellor to cut VAT on home improvement to boost the construction industry

In its letter to George Osborne ahead of next month’s new scheduled Autumn Statement on December 5, ICAEW calls on the 5% rate to be reduced among other recommendations.

They include guaranteeing loans provided by banks for businesses that have been trading for two to five years and extending rate relief until at least 2015.

ICAEW asks Osborne to “restore confidence in the tax system” with a cap on the total administrative costs of tax changes to small business and HMRC to be brought within the ‘one in, two out’ deregulation policy.

Also, HMRC should extend the exemption for SMEs from the new Real Time Information (RTI) ‘on or before’ requirements.

Finally, “strengthen confidence in public finances” with the appointment of a government wide Chief Financial Officer to help deliver anticipated spending cuts of 3.5% from 2015.

Michael Izza, ICAEW chief executive, said, “Going forward, three things matter: the recovery has to be sustainable over the long-term; its effects need to be felt across the whole of the country; and the choices made now must enable the UK to compete effectively in a global economy in the years ahead.

“Although the ICAEW Business Confidence Monitor for Q4 2013 identified a fifth consecutive quarter of rising confidence, structural problems remain. Public sector debt stands at £1.21trn – more than 75% of UK GDP. This is unsustainable and we think the coalition should be taking steps to reduce it now.”

Raymond Doherty

 

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