According to a pre-Budget survey carried out by accountants and business advisers BDO LLP, 4 in 10 business leaders believe reducing employment tax should be the Budget’s priority.
To complete the research, BDO spoke with more than 900 individuals.
39% of respondents believe that reducing employment tax by lowering employer’s NIC (National Insurance Contributions) from 13.8% to 12% should be the Chancellor’s number one priority for business taxation.
Stephen Herring, senior tax partner at BDO, commented: “This is, in effect, a ‘jobs tax’ that raises over £40 billion for the Exchequer but almost certainly at the expense of a higher level of unemployment. We are not optimistic that the Chancellor will align himself with this view because of the tax revenues collected by the hard pressed Exchequer and the increasing complexity of maintaining the corporation tax base.”
In addition, 17% of respondents urged the Chancellor to reduce the main rate of corporation tax to 18%.
In relation to personal tax, 38% of business leaders are calling for an increase in the basic rate tax band to £45,000 per annum and for the Chancellor to set the level of higher rate tax for future years at around twice median earnings as their key tax wish.
Mr Herring said: “Both the current Chancellor and his predecessors have ‘raided’ the basic rate tax band to recover much of the cost of increasing the personal allowance towards £10,000. We consider that either the band should be increased to, say, £45,000 so that no one pays higher rate income tax until their earning exceed £55,000 (i.e. approximately twice median earnings) or lower, intermediate £5,000 tax bands should be introduced at new 25% and 30% income tax rates.”
The respondents’ second priority is reducing the burden of inheritance tax by cutting the rate of tax from 40% to 25% and increasing the threshold from £325,000 to £500,000.
