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ICAS calls for stability in tax system

31 Dec 08

Responding to the Pre-Budget Report, The Institute of Chartered Accountants of Scotland (ICAS) welcomes new tax measures aimed at helping business through the current crisis, but criticises the chancellor for introducing unnecessary complexity to the system

ICAS welcomed the commitment to a broad exemption for foreign dividends, which should support the stability and competitiveness of the UK economy, and short-term measures to help businesses survive the recession. However, it deplores tax changes likely to discourage employment, such as the proposed increase in National Insurance contributions, or to impose unwelcome additional tax burdens.

Bob Crawford, convener of the Institute's tax committee, said: “Even in a crisis, short-term measures to assist businesses and individuals should be consistent with a considered policy which will strengthen the UK economy.

“Temporary reductions in VAT will impose extra administrative burdens on many small businesses and may not give the economy the boost it needs. While a new higher rate tax band would be a political measure, restricting personal allowances for those with high incomes adds unjustified complexity to the tax system.

“We have urged the government to recognise that the UK tax regime needs to be simplified.”

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