Comments from PwC's tax practice on the consultations announced in the Spring Statement.
On entrepreneurs relief
Commenting on the consultation on changes to entrepreneurs relief, Alex Henderson, tax partner at PwC, said:
“Entrepreneurs relief can act as a significant incentive for small and growing businesses. The loss of the relief for some companies looking to raise capital by issuing shares had proved a barrier to growth.
“Even entrepreneurs who were not affected will welcome this sign of tangible support from the Chancellor.”
On business rates revaluation
Commenting on the decision to bring forward the next business rates revaluation to 2021, Phil Vernon, head of rating at PwC, said:
“The decision to move to three yearly revaluations is a measure that will help business in the long term but does little to help the high street struggling with the effect of the 2017 revaluation and escalating rates demands for the next three years.
“The Government now feels it can deliver revaluations more often as their ‘Check, Challenge, Appeal’ system has cut the levels of business rates appeals by around 95%, leaving the Valuation Office Agency free to concentrate on delivering revaluations.
“It is disappointing that there haven’t been steps to move the valuation date closer to the revaluation date, which would have made business rates even more responsive to rental levels in the property market.”
On VAT threshold
Commenting on the consultation on changing the VAT threshold, Martin Blanche, head of indirect tax at PwC, said:
“The ‘cliff edge’ approach to VAT registration is unwelcome, and it would be preferable to develop a soft landing for taxpayers. A 24-month rolling period as the determining period for businesses operating on or around the threshold would be preferable to the current shorter period. It should be a better indicator of whether the business is likely to continue to trade above the threshold for a reasonable length of time.
“However the threshold is restructured, HMRC and HMT will need to maintain a balance between addressing the issue and over-complicating any transitional or staggered threshold measures to ensure certainty and clarity for businesses.”
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