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ICAEW responds to Autumn Statement tax measures

Author: ICAEW

Published: 22 Nov 2023

Frank Haskew, ICAEW Head of Tax, responded to the tax measures announced in today’s Autumn Statement:

“Although both employed and self-employed people will receive a boost to their incomes through cuts to national insurance, some differential between the two rates remains. With no reduction in the rate paid by employers there is still an incentive for firms to claim people are self-employed to reduce their contributions. The freeze on thresholds will still drag many people into higher tax bands.

“We agree with the Chancellor’s decision to make full expensing for companies permanent. The certainty it will provide might arguably be a bigger benefit than the tax cut, as our business and practice members have been telling us that they prize certainty above anything else. We are pleased that the government plans to consult on simplifying the capital allowance regime.

“Given our concerns about HMRC’s service standards, we are disappointed that HMRC’s budget appears to be being cut which is bound to have an impact on its ability to meet the ever-increasing demands being placed on it.”

Responding to the outcome of the review into how Making Tax Digital Income Tax Self Assessment (MTD ITSA) might be adapted to the needs of smaller self-employed and property businesses, announced in Autumn Statement 2023, Caroline Miskin, ICAEW Senior Technical Manager, Digital Taxation, said: 

“The outcome of this review represents a missed opportunity for fresh thinking on MTD ITSA, which we have consistently called for.

“The government has decided to keep under review the decision on mandating self-employed businesses and landlords with a turnover under £30,000 to meet the MTD ITSA obligations, and we agree it should not be extended to further taxpayers at this stage.

“The other changes announced are helpful but don’t go far enough to alleviate the significant administration burden that MTD ITSA will place on those with income from self-employment and property. In particular, the administrative burden associated with quarterly updates is disproportionate and needs a rethink.

“Software developers face difficult decisions because their investment cases do not look attractive. This may hinder their ability to deliver suitable products, including some that would be genuinely free.

“We strongly urge the government to prioritise the digitalisation of HMRC services as a key part of the sorely-needed reforms to improve customer service. While we support the use of software for maintaining accounting records, the current MTD ITSA policy design is not the way forward. We remain very doubtful about whether the plans are deliverable and whether HMRC will receive the additional tax revenue that it anticipates.”


Notes to editors:

CONTACT: ICAEW media office stephen.froome@icaew.com or 07970 402 073