Ahead of tomorrow’s Budget, AAT (Association of Accounting Technicians) (@YourAAT) is again calling on the government to further increase investment in skills and training; support small businesses and regulate accountants.
Economic crime levy exemption for small businesses
Government intends to impose an annual £100m “economic crime levy” on British businesses in order to further fund the fight against money laundering. The levy will be imposed on solicitors, accountants, tax advisers, conveyancers and others who are regulated for anti-money laundering purposes. Most will inevitably pass the costs on to their clients.
Adam Harper, Director of Professional Standards and Policy, AAT, said:
“The Covid-19 pandemic and Brexit are combining to cause the collapse of an increasing number of small businesses and many more will be impacted for a long time to come, so adding further costs and administrative burdens in the form of a £100m annual levy will be another unwanted challenge for most.
Investment to tackle money laundering is important but not at the expense of further damaging small businesses. A small business exemption would therefore be a practical, effective and welcome measure that Government could easily introduce.”
Write off all genuine Bounce Back Loans
The government’s Bounce Back Loan Scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover up to a maximum of £50,000. It has helped over 1.5m businesses at a cost of more than £45.5bn. The Government has admitted up to 60% of these loans could be written off, with the Public Accounts Committee suggesting the figure could be as high as 80%. AAT has long recommended that all legitimate Bounce Back loans be written off, a suggestion that is attracting increasing political and business attention.
Adam Harper said:
“As AAT first highlighted back in September last year, writing off legitimate Bounce Back Loans would save taxpayers money as the government will no longer be obliged to make interest payments for the remainder of the ‘interest free’ period and avoid the need for banks to use costly debt recovery agencies. Perhaps more importantly, it would also enable a speedier recovery by boosting much needed investment and growth.”
Increased support for learning and skills
AAT acknowledges that Governmnent has made some welcome announcements in this area but there is much more to do.
Adam Harper said:
“The government needs to urgently revisit the idea of introducing tax relief for self-funded work-related training – something that most other OECD countries already do – which would help remove some of the financial barriers to the upskilling and reskilling of the British workforce that the economy so desperately needs.
“Recently announced changes to apprenticeships are welcome but these could go much further, not least by broadening the Apprenticeship Levy to include other types of high-quality training, such as traineeships and renaming it “The Skills Levy” to reflect this.
Reform of the accountancy sector to protect consumers and small businesses
The audit sector of the accounting industry is soon likely to have one of the strictest regulatory regimes in the world, bringing the manner in which the rest of the accountancy sector is regulated into much sharper focus and ultimately demonstrating the disjointed nature of regulation in the UK.
A third of high street accountants are currently unregulated. To address this fact, AAT has repeatedly stated that anyone offering paid for tax or accountancy services should be required to be a member of a recognised professional body.
Adam Harper added:
“Compulsory professional body membership would provide much greater consumer protection for both individuals and businesses, especially micro and small businesses, many of whom currently receive advice from unregulated agents.
Egregious tax avoidance, tax evasion and money laundering activity is self-evidently likely to be more prevalent in the unregulated sector but more commonly, errors and mistakes, as well as bad and misleading advice, combine to cause a plethora of financial and administrative problems for individuals and small businesses alike. The Government could easily reduce these problems by requiring compulsory professional body membership but has repeatedly refused to do so.”