Autumn Statement 2023 – responding to HM Treasury
Crowe UK’s response to HM Treasury’s request in advance of Autumn Statement 2023
We welcomed the opportunity to respond to HM Treasury’s request for representations regarding current government policy, and to suggest new fiscal policy ideas for consideration in the upcoming Autumn 2023 statement.
The total amount of revenue that the UK government collects in taxes continues to rise, but the tax system requires modernising in order to lead a change in behaviours.
In our view, UK businesses require more support to grow and while climate change and commitment to meeting net zero targets by 2050 is at the forefront of the government’s current agenda, there remains limited fiscal incentives for businesses to invest in these objectives. In terms of implementing new policy, we propose a number of ideas for your consideration around two central themes:
- Fiscal Growth
- Promoting sustainability.
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Update - 11 December 2023 It is disappointing that some of the other requests made in Crowe’s submission to HM Treasury have not been met. The VAT registration threshold remains the same maintaining the cliff edge preventing some small businesses from expanding as they restrict their turnover to remain underneath the compulsory VAT registration threshold of £85,000. A survey by the Tax Policy Associates Ltd calculated that 26,000 businesses were restricting growth. The other area that Crowe UK had called for was for the hospitality and leisure sector to receive support through the application of a reduced rate of VAT applicable to their sales. This continues to be a sector that is struggling to balance inflationary cost pressures with a general decline in visitors to town centres which is squeezing profit margins. Many countries around the world have a reduced VAT rate for this sector and one was also applied in the UK during COVID to support the sector. A lower rate of VAT would reduce costs for consumers and the resulting increase in sales would give businesses the ability to invest in new/ upgraded premises and also bring a benefit of helping to revitalise our towns and highstreets. |
