Sponsored content: Election 2017 – Suffolk businesses hit by hurried finance bill in wake of election announcement
- Credit: PA
There is hope next month’s General Election will bring clarity to the world of politics, but there are fears it could add to the confusion for Suffolk’s small and medium businesses.
The fact the election announcement was called so hastily has already caused some unrest, as Keith Senior, of Jacobs Allen Chartered Accountants and Chartered Tax Advisers, explains.
“When the snap election announcement was made two-thirds of the finance bill was dropped to push it through parliament that afternoon. Things that had been anticipated didn’t happen,” he explained.
“There will be people who were expecting certain tax arrangements to apply from April 1 because they were announced in the spring Budget. They may have put plans in place to make sure they could avail themselves of benefits or made decisions about how to cope with a more restrictive regime, and then those anticipated changes were dropped. This creates uncertainty which is unwelcome.”
Some individuals who had accessed their pensions using the freedoms introduced in 2015, and need to know how much more money they can put in to their pension after April 5 may have planned this and then been caught out.
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Likewise, businesses hoping to take advantage of a proposed relaxation in the rules of substantial shareholding exemption – which was then withdrawn from the bill – will have been hit financially.
“People will have made plans based on the assumption they would get that relief, and that could be a real problem for them,” said Mr Senior, a director at Jacobs Allen, which has offices in Bury St Edmunds and Haverhill.
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A more widespread issue is the fact the plans to introduce digital tax returns were dropped, at least for now. This initiative may be reinstated at a later date but again we could see a relatively short period between an announcement and implementation, putting pressure on businesses.
This, combined with the ongoing Brexit negotiations, which are set to step up a gear following the election, is making financial planning more difficult than ever.
Added to this, there was the recent u-turn over plans unveiled in the Budget to increase the national insurance contributions paid by those who are self-employed.
“The chancellor had failed to acknowledge the risk entrepreneurs take in opting to be self-employed rather than taking up employment. Now, the changes made in haste to get the Bill passed leave taxpayers with a conundrum as to their tax position – that is never acceptable but particularly so as we head into our departure from the EU.”
In taking risk, entrepreneurs need to have as much certainty as possible and it must be acknowledged that they are helping drive forward our economy. Mr Senior believes this should be encouraged now more than ever as he fears there could be tough times ahead.
“The recent posturing by EU leaders has given the appearance they have all of the control. I hope that the result of the election will give the Government a clear mandate to deliver what the UK actually needs from a business perspective.”
Mr Senior continued: “Many smaller businesses that we deal with will not be directly impacted by the changes that happen with the EU because they don’t trade internationally but they could feel the knock-on effects from the larger businesses they work with who do trade internationally.”
For further help with your finances and tax arrangements amidst the changes, contact Jacobs Allen today.