Clive Owen LLP

The Chancellor announces his Spring Statement next week, which is essentially a mini budget giving an update of the health of the economy. However, with the country’s finances under extreme pressure, what can we expect the Chancellor to announce. Lee Watson, Tax Partner at Clive Owen LLP, gives his thoughts on the matter.

Lee commented: “It will be an interesting statement, that is certain. The cost of living crisis is at the forefront of minds at the moment with energy bills rising as well as interest rates and personal taxes increasing. In addition, businesses are facing increasing taxes due to the increase in employer national insurance and the corporation tax increases planned for 2023, as well as the cessation of the furlough support last year. It is certainly a tough time financially and the unknowns still play a part in relation to the appalling situation in Ukraine as well as the ongoing pandemic.”

Lee believes that the statement is very difficult to predict as there are so many factors to consider in a period of great uncertainty. Lee commented on the situation facing the Chancellor:

“It is clear that action needs to be taken in relation to the energy crisis and fuel bills. The question is how is this achieved. Does the chancellor cut fuel duty, provide further one-off support for energy bills or look to raise benefits, pensions and tax bands in line with a high rate of inflation? Does he look to scrap the health and social care levy that will be introduced in April?”

However, cutting costs means that the Chancellor will need to seek to raise funds now or in the future from other areas as Lee states:

“Reducing income into the Treasury coffers now, means that more will need to be collected in the future. There have been consultations in recent years regarding aligning capital gains tax rates with income tax rates, which could be a way that the Chancellor can increase tax take. In addition, every year there are rumours of cuts to pensions tax relief. There is also expected to be an overhaul of R&D tax relief to reduce the amount that can be claimed by SME businesses where the government feel there is abuse of the system. We await next week’s announcements with bated breath.”

ENDS

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CONTACT: Caroline Walker on 01325 363436

Notes to editors:

Clive Owen LLP are Chartered Accountants and Business Advisers, based in Darlington, Durham and York.

The firm has 12 partners and more than 110 staff across 4 offices in Darlington, Middlesbrough, Durham and York.

It is an independent and commercially driven regional accountancy firm providing value added services to corporate, commercial, public sector and private clients.

Over the past thirty-seven years the firm has established itself as one of the largest and most trusted professional firms in the North East. This has been achieved by working closely with its clients to understand their needs and aspirations to ensure they achieve their financial goals.

Its services include:

Audit and Accountancy

Tax

Business Planning

Managed Services

Corporate Finance

Grants

It is a member of Kreston Global which is a worldwide network of independent accountancy and advisory firms.

Founded in 1971, Kreston offers reliable and convenient access to high-quality services through member firms located around the globe. Currently ranking as the 12th largest accounting association in the world, Kreston now covers 125 countries providing a resource of over 25,000 dedicated professionals.

This global network can be of huge value to our clients who can benefit from enhanced research coverage, local market knowledge, and cross-border professional expertise.