Chancellor Phillip Hammond has been told to use his inaugural Autumn Statement to reduce corporation tax, support infrastructure spending and consider a temporary cut in VAT in order to counteract rising prices.
Professional services bosses across Yorkshire have issued Mr Hammond with a series of recommendations as he prepares to take to the dispatch box tomorrow to deliver the first significant update on future plans for the economy since the decision to leave the EU.
The chancellor is rumoured to announce extra cash for science research, infrastructure investment and measures to help ease the pressure families struggling to get by.
Richard Little, tax partner at KPMG in Yorkshire, said: “Our client surveys consistently show that companies look for stability, predictability and certainty, both in economic and political terms when it comes to deciding where to do business. The UK was previously one of the most attractive locations but whilst uncertainty over a post-Brexit UK remains, we may find companies more reluctant to invest.
“From a tax perspective, the recent commitment by Philip Hammond to continue reducing the headline corporation tax rate to 17 per cent by 2020 is a good start.”
Tim West, Head of Tax at EY in Yorkshire, said: “The Chancellor heads into his first Autumn Statement with the economy following the Brexit vote faring better than many predicted. As a result, he may look to ready many of the measures used during past times of economic shock but may opt to defer unleashing them until the 2017 Budget. The Chancellor could consider various tax measures to boost infrastructure investment. We could see a systematic review of the incentives that the tax system creates towards investment, which could give rise to restoring relief for spending on industrial buildings and potentially going further.”
He added that a cut in VAT would boost spending, hampered by the weak value of Sterling.
Members of Leeds Building Society said they wanted to see a scrapping of taxes on savings interest and a cracking down on tax evasion in the Autumn Statement.
Richard Fearon, chief commercial officer, said: “Cracking down on tax evasion to make sure people and businesses pay their fair share was another popular topic, as was removing tax paid on savings interest, potentially altogether, as many savers will already have paid tax on their money before investing it.”
Meanwhile Andrew Coticelli, tax partner with Deloitte in Yorkshire, said he did not anticipate any major tax reductions or spending increases and that Mr Hammond would instead focus on providing stability for businesses.