With less than a week to go until Chancellor Rachel Reeves delivers her Autumn Budget, the team at Ryan, a leading global tax services and software provider, share their thoughts on what they feel the Government should be prioritising when it comes to UK tax policy.
Introduce new or enhanced investment incentives
Andrew Burman, Principal of Tax Technology at Ryan, said: “Business owners across the UK are eager to achieve growth, and we need to see new or enhanced investment incentives to support their ambitions.
“For example, if the government is serious about making the UK a global hub for AI, we need to see more grants or tax relief for capital expenditures that will encourage companies to invest in this technology. This will make it more feasible for businesses to adopt new equipment or technology that will help streamline their operations and drive long-term commercial success.”
The UK’s tax system is still too complicated for businesses
Andrew Burman, Principal of Tax Technology at Ryan, said: “We urgently need more clarity on ‘Making Tax Digital for Corporation Tax’ (MTD for CT). The scheme is being introduced to make it easier to file tax returns and reduce errors that lead to over- or underpayment. However, the government has not been clear in terms of timing or exact requirements to help businesses plan in advance. This needs to change.
The government has promised to cut unnecessary red tape and ensure regulators prioritise economic growth in their decision-making. By clarifying the new MTD for CT scheme and simplifying and standardising the UK’s tax code to support compliance processes, the government can provide businesses with greater confidence and certainty.
It’s in the government’s benefit to provide a clear pathway towards automation, as this will give businesses more transparency and insight into their data. This will speed up timely and accurate tax returns, driving new value for the government and helping them achieve the growth outlined in their manifesto.”
Encouraging innovation is critical to the UK economy
Nigel Holmes, Director of Research and Development at Ryan, said: “It’s unlikely that we’ll see changes to the UK’s R&D tax regime in the upcoming budget, following the recent consolidation of the two schemes back in April. However, in an ideal world, we would see an increase in R&D tax relief rates. This would encourage more innovation in the UK, creating job opportunities and driving nationwide economic growth.”
More alignment across innovation funding
Jon Williams, Senior Director of Grants at Ryan, said: “We need greater alignment between different innovation funding incentives, including grants and tax credits, across the various government departments and affiliated groups that currently provide them. UK businesses often struggle with the complexity of the current government funding landscape, particularly regarding how different incentives can interact and work together to support further investment. The government’s efforts to mobilise more ‘patient capital’ from UK pension funds and blend it with government support is an encouraging start for businesses.”
Increase the uplift rate for the Land Remediation Relief
Raj Ghose, Manager of R&D Tax Analysis at Ryan, said: “To encourage property developers to prioritise the redevelopment of brownfield land and meet housing targets, the government should strongly consider increasing the 50% uplift rate for Land Remediation Relief. This would also help deter developers from encroaching on pristine greenbelt areas, preventing the destruction of wildlife habitats and farmland.”
Boost business investment through super deductions
Dean Needham, Senior Manager, Capital Allowances Tax Analysis, Ryan said: “With the repeal of super deductions for capital allowances in 2023, replaced by full expensing, the government should consider reintroducing an enhanced 30% tax relief on top of the investment value. This measure would encourage businesses to invest again, but it must be introduced for a more extended period this time.
“For this measure to be effective, it must go beyond the previous two-year window to give businesses the opportunity to plan their investments more effectively. A longer-term approach by the government would help ensure the super deduction achieves its goal of driving sustained economic growth.”
Introduce tax credits to support companies that are struggling
Dean Needham, Senior Manager, Capital Allowances Tax Analysis, Ryan said: “One barrier our clients face with the capital allowances regime is that when their business is making a loss, there is no immediate benefit or incentive for them to invest, as the relief only becomes valuable once the business generates taxable profit. Many businesses encounter this challenge during their early years while absorbing initial startup costs.
A step towards global tax alignment
Jun Miyake, Principal of Tax Technology at Ryan, said: “We welcome the announcement of a consultation aimed at promoting the adoption of e-invoicing in the UK, especially as the rest of Europe moves towards this system in the short to medium term. This initiative is a positive step towards modernising our financial processes and aligning with other tax jurisdictions in Europe and around the world.
“However, the success of this initiative will depend on the details of the system the UK government proposes to adopt, which have yet to be revealed. We look forward to seeing a robust framework that supports businesses in transitioning to e-invoicing and enhances efficiency in the invoicing process.”
