ICAEW reaction to the BudgetICAEW expert analysis of the Budget 2018
Read ICAEW's CEO, Michael Izza's reaction to the Budget announcements, alongside analysis from ICAEW's experts on the implications for taxation, public finances and business.
Budget 2018 ReportTechnical managers from ICAEW Tax Faculty provide a summary of all the new announcements relating to tax in the 2018 Budget.
Read a comprehensive break down of the announcements relating to tax in the Budget 2018, covering: business tax; personal and employment taxes; pensions and savings; VAT and duties; and rates and allowances.
This is a summary of the announcements on tax and related matters. It has been prepared by the ICAEW Tax Faculty team, with an overview by Frank Haskew, and edited by Jane Moore.
All the government announcements and publications can be found on gov.uk. There is also a page with links to all the tax-related documents and announcements.
The main Budget documents are the Red Book, which summarises the Budget announcements and policy decisions, and the Overview of Tax Legislation and Rates (OOTLAR), which sets out details of each policy announcement.
ICAEW has a UK Budget 2018 page which brings together our commentary on all aspects of the Budget.
The Finance (No. 3) Bill 2017-19 (referred to here as FB 2018-19) will be published on 7 November 2018. This Bill will become Finance Act 2019.
Video analysisICAEW will be providing two pieces of video analysis after the Budget
In a series of online video broadcasts and webinars ICAEW will be examining the tax implications of announcements and the broader UK economic picture.
31 October - The NHS, Brexit and more: TAXtalk Budget 2018
On Wednesday 31 October Frank Haskew and Anita Monteith from the Tax Faculty, were joined by ICAEW's director of public sector Ross Campbell in a special TAXtalk broadcast. The panel will provided analysis and discussion of the key announcements from the Budget.
16 November - Tax Faculty Budget webinar
On Friday 16 November, at 11:00, technical managers from ICAEW's Tax Faculty will be providing their insights into all of the tax-related announcements in this year's Budget. The webinar is available to all ICAEW members, as well as Tax Faculty members and Faculties Online subscribers.
ICAEW letter to the ChancellorOn 15 October ICAEW CEO Michael Izza wrote to the Chancellor of the Exchequer
In this letter, ICAEW's CEO outlines that while the government must provide organisations with clarity over the UK’s relationship with the EU, further support is needed to promote the UK's competitiveness and enable innovation.
Michael Izza calls for coordination in the creation and implementation of regulation, alongside independent monitoring, as well as for further action to be taken in support of industry and to address the skills gap.
15 October 2018
Rt Hon Philip Hammond MP
Chancellor of the Exchequer
1 Horse Guards Road
In your Mansion House speech you said decisions taken in the next few months will shape the UK economy for decades. That is why this year’s Budget is so important. It is an opportunity to set the UK on a course towards an economy that continues to support world leading industries and is home to the markets of the future.
The form of the UK’s relationship with the EU is vital to business. However, this must not be the exclusive standalone focus of the government’s economic planning. A much wider programme of support is required that provides certainty, promotes competition and enables innovation.
When businesses succeed, society benefits - creating jobs, wealth and adding to tax revenues. To meet the challenges facing our society in the coming decades, the UK needs a strong and growing economy.
Providing certainty for services
Accountancy and professional services are vital components of the ecosystem that underpins markets, guiding and advising businesses in every sector of the economy and providing the expertise that maintains London’s position as the world’s leading financial centre. The right deal with the EU is key to ensuring our continued ability to facilitate investment and influence global standards. We ask government to:
- Deliver a deal that supports UK professions: We welcome the importance afforded to the mutual recognition of professional qualifications in the Chequers White Paper which is highly relevant for all professions. Our aspiration is for the incorporation of accountancy and audit within the deep economic partnership approach in the White Paper and for a similar type of UK-EU regulatory interaction as that outlined for the financial services sector.
- Develop a network of advice: All businesses require certainty and a clear road map on what to expect as the UK exits the EU. Government must redouble its efforts by working with organisations like ICAEW, whose members advise more than two million business in the UK, to promote the availability of business support and guidance.
Creating a competitive business environment
Our Business Confidence Monitor (BCM) shows regulation as the biggest challenge facing companies. The impact of regulation on business has grown over the last eight quarters reflecting the quantity of legislation and compliance introduced. Examples of more recent changes include: IR35; auto enrolment pensions; the roll out of Making Tax Digital; GDPR; as well as the increasing depth of health and safety legislation. We ask government to:
- Coordinate across government: The government needs to act in concert to manage the application and timing of new regulations. This should include a slowdown in the introduction of new tax legislation. Pressure on government departments, caused by Brexit, is leaving those responsible for developing and implementing new policy in the tax system under-resourced.
- Create independent oversight: There should be independent monitoring by the National Productivity Council of the impact of regulation on productivity growth, especially for certain hard-hit sectors.
Investing in markets and jobs
Investment by the government in research and development and innovation has never been more important. Currently, UK investment in innovation is dwarfed by international competitors. Investment has a distinctive multiplier effect for the economy, enabling growth in all parts of the UK. For example, the £2.5bn allocated to British Patient Capital creates a significant opportunity to boost investment in the expansion and scale-up of UK companies. We ask government to:
- Implement the industrial strategy, second wave: Build on the commitments in the Industrial Strategy to support innovation in activities, such as next-generation financial services with a second wave of investment. Significant investment in digital infrastructure throughout the UK is needed to drive productivity, innovation, regional business creation, education and the better provision of public services.
- Address the skills gap: There is a mismatch between the skills sought by businesses and their availability within the labour market. The government must boost the status of technical educational programmes and take into account the regional disparity in the availability of skills. All regions within the UK must have access to the right skills to enable growth and spread prosperity.
I would welcome the opportunity to discuss this in more detail.
Michael D M Izza
ICAEW action ahead of the BudgetRead more analysis by the ICAEW ahead of the Budget
In the months and weeks running up to the UK's last Budget ahead of the Brexit deadline, ICAEW has been actively engaged in examining the country's finances and policies.
Alongside writing to the chancellor and responding to government consultations, ICAEW has published research into UK business confidence, worked with the Fabian Society to examine the Labour party's spending choices and contributed to the IFS Green Budget.
ICAEW contributes to IFS Green Budget 2018
ICAEW has contributed its expert insight into the UK government's finances for the fourth time, in the Institute of Fiscal Studies (IFS) Green Budget 2018. Alongside hosting the launch at Chartered Accountants Hall, ICAEW is provided two chapters examining the UK governments assets and defence spending.
ICAEW writes to chancellor, urging support for industry and coherent regulation, alongside Brexit support
In his annual letter to the chancellor ahead of the Budget, ICAEW's chief executive Michael Izza argued that while the government must provide organisations with clarity over the UK’s relationship with the EU, that further support is needed to promote the UK's competitiveness and enable innovation. He called for coordination in the creation and implementation of regulation, alongside independent monitoring, as well as for further action to be taken in support of industry and to address the skills gap.
ICAEW Rep 115/18: Budget Autumn 2018
ICAEW's Tax Faculty has responded to HM Treasury's invitation for comments ahead of the 2018 Budget. The response concludes that there should be no new policy initiatives on tax at this time. Attention should instead be given to enabling taxpayers easily to fulfil their obligations and to understand their entitlements. Coping with HMRC’s digital systems has been made more difficult by the number of policy changes.
Britain can’t escape a global trade war – so we have to stop it
ICAEW's public sector director, Ross Campbell, looks at the current US-China trade war and discusses its impliations in this CityAM article. "This Sino-American sneeze will mean the rest of the world coming down with something nasty – and the UK will be no exception," he argues.
UK's economic forecast remains sluggish
ICAEW published it's latest quarterly economic forecast for the UK on 14 September 2018. The research concludes that rollowing a weak start to 2018, the UK economy has seen a slight pick-up due to the weather and the World Cup. GDP growth in 2018 forecast at a sluggish 1.3%, but a modest improvement is expected in 2019
UK Business Confidence Monitor Q3 2018
The latest ICAEW Business Confidence Monitor (BCM) shows business confidence falling into negative territory in Q3, reflecting global trade disputes, Brexit divisions, slower domestic sales growth and concerns about increased regulations.
Can a Labour government balance the books?
In its last manifesto, the Labour Party pledged to bring the water, rail and energy sectors back into public ownership, while at the same time introducing a Fiscal Credibility Rule. But is it possible to do both and ensure the sound economic future of the UK? ICAEW has joined forces with the Fabian Society to explore the tough spending choices that would face a Corbyn government.