Tories suggest capital allowances reform likely

News Article - 19 April 2010
Category: Regulatory

The Tories have strongly hinted that capital allowances could undergo a major legislative reform following a successful general election. A party spokesperson recently said they added to the complexity of the tax system, and criticised Labour for introducing measures that are unhelpful to the business community. According to the spokesperson the amount that manufacturers invest has fallen by 44 per cent since Labour introduced capital allowances.

Experts have suggested the Tories may scrap capital allowances to help pay for a 3% cut in corporation tax to 25%, which was announced by shadow chancellor George Osborne in March. Industry leaders are divided as to whether cutting capital allowances will offer any tangible benefit to the business community.

With the general election fast approaching, the major political parties are trying to strongly appeal to the business community to gain valuable votes. With opinion polls revealing no clear leader, both parties are aggressively pursuing support from business leaders to increase the chances of forming a government. Just as the Conservatives commented on capital allowances, Labour pledged a £6bn cut in business regulation costs.

Companies watching the pre-election arena closely should be optimistic yet cautious regarding the possibility of an improved legislative environment following the general election. Although recent pledges have had a pro-business slant there is no guarantee they will become law once a new government has been formed.

All companies must prepare for a wide range of scenarios by strengthening company infrastructure to ensure all legislative reforms can be adequately absorbed. In the current unstable economic climate, companies must ensure that legislative reforms do not disrupt operations too much or profitability could be hit.

Access business software is a unifying solution that allows business departments to communicate with each other in real time, ensuring valuable financial data is continuously shared with decision-making areas of the business, such as the boardroom. With full financial disclosure available, companies are in a better position to actively respond to legislative reforms and make the most of any business environment.

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

Article keywords: Business legislation, capital allowances, corporation tax, business software, Access business software

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