Major political parties set out tax policies

News Article - 28 April 2010
Category: Regulatory

As the battle to form the next government heats up between the major political parties, taxation has emerged as one of the more prominent divisions. All three parties have made key pledges regarding new taxation initiatives, yet businesses and advisers are unsure exactly what a new administrative and tax system will mean for them, and how much government support will be offered.

Industry criticism has focused on the relative staleness of taxation pledges, arguing they are simply rehashed promises mixed with election rhetoric. Tax polarisations have dominated the agenda with diverse policies coming from all three parties. The Conservatives believe tax rises can be prevented by cutting public waste, whilst Labour thinks the rich must pay a fair share to drive economic recovery. The Liberal Democrats are aiming to widen their appeal by giving money back to low and middle income earners. This will be achieved through taxes on high-earners such as the proposed 'Mansion tax' on homes worth over £2m.

Business leaders argue the run up to the election should be used to iron out problems with the current system and improve its openness and stability, which will help future economic recovery plans. The Institute of Chartered Accountants in England and Wales (ICAEW) recently called for the next parliament to reform how tax law is formulated to increase 'clarity, fairness, effectiveness and certainty.'

Other business groups have criticised the fairness of current taxation legislation on UK businesses and have asked for the framework to be tweaked to make it more attractive to investors. Reducing the corporate tax burden has been noted as one of the essential measures that must be addressed.

In summary all business groups are looking for clarity over how the new government will address the budget deficit and confidence that good fiscal prudence will be followed that will not unfairly penalise businesses looking to compete on a national and international level.

All businesses must be prepared for uncertain times ahead in relation to taxation. Following the general election there is likely to be a period of uncertainty as the new government finds its feet, and there is no guarantee that pro-business taxation pledges made in the run up to the election will reach the legislative stage. Companies must ensure infrastructure is strong enough to make the most of the taxation system to gain a competitive edge in the post-election environment.

Access business software improves a company's financial resilience and improves the efficiency of operations through sound fiscal management. Most importantly, the package receives regular updates that are automatically applied to all business divisions, meaning companies constantly work within the confines of current legislation. Because these updates are automated, businesses benefit from increased resource availability that can be distributed more efficiently.

For more information, please call Access on 0845 345 3300.

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