ICAEW calls for action to boost UK’s productivity and resilience
The institute recommended the introduction of incentives to support sustainable business growth and long-term funding streams for local councils
Ahead of the Autumn Statement on 22 November, the ICAEW has outlined a series of actions that the government should prioritise to increase productivity and resilience.
In a letter to the Chancellor, the institute recommended the introduction of incentives to support sustainable business growth and long-term funding streams for local councils, as well as tax simplification and action to improve HMRC service standards.
Michael Izza, chief executive of ICAEW, wrote: “Our tax system currently inhibits job creation and economic activity because complicated cliff edges on rates, thresholds and allowances act as growth blockers. Businesses are being stifled and tax revenues restricted due to poor HMRC service standards.”
Izza also called on HMRC to be held to account when it misses targets, while acknowledging that the organisation will only be able to administer the UK tax system effectively if it is resourced and organised appropriately.
Other barriers to productivity highlighted in the letter included access to finance and skills shortages. ICAEW recommended the government revamp the Apprenticeship Levy to give businesses more flexibility in training, and called for investment incentives, such as full capital allowance expensing, to be made permanent.
The letter also urged the government to re-establish its green credentials and provide certainty to businesses wanting to make investments in sustainable technologies.
Alongside reviewing current R&D incentives, with special support for SMEs, ICAEW suggested a net zero investment strategy combining incentives, regulation and spending targeted to relevant sectors.
Izza said: “A clear strategy is needed to increase the resilience of the UK economy, underpinned by certainty, clarity, stability and the right long-term incentives to influence investment, employment and growth.
“The structural failures in the local audit system, with nearly a thousand delayed audits, may have serious financial consequences for communities across England.”
He added: “We hope the Chancellor will use the Autumn Statement as an opportunity to increase the resilience and sustainability of the public finances, with a cross-government effort to clear the mountain of delayed audit opinions to get the system back on track.”
