Finance Bill Received Unenthusiastically By UK Business Leaders

by Robert Lee, Tax-News.com, London

30 May 2002

In its quarterly monitor of tax developments affecting UK business, released last week, the Institute of Directors (IoD) passed comment on the Finance Bill currently making its way through parliament.

Richard Baron, Deputy Head of the Policy Unit at the IoD announced recently that while the Institute cautiously welcomes measures set out in the Bill to simplify the tax system for small businesses, there are concerns with regard to the implementation of some of the measures announced by Chancellor Gordon Brown last month.

Mr Baron also stated that the IoD stands firmly behind its post-budget condemnation of the 1% increase in National Insurance Contributions:

'This is not a bad Finance Bill,' he observed recently. 'But we must not forget that the Budget also brought in £8 billion of tax rises through the extra 1% on National Insurance.' He continued: 'National Insurance is outside the Finance Bill process, but it will be very much inside business budgets and the increases will be very damaging indeed.'

In its 'Tax News' monitor, the IoD expressed stressed the importance of setting the flat-rate percentages at levels which are revenue-neutral, rather than biased in favour of the Exchequer with regard to the new flat-rate scheme for VAT. The Institute also expressed concern that new rules outlining the taxation of intangible assets ran to 65 pages, suggesting that 'the basic plot, of following the accounts, has been lost'.

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