Azets SME tax expert predicts government tax grab in 2022 – London Business News

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A leading SME tax expert is urging businesses to take advantage of the new and expanded regimes while they still can, ahead of rising inflation and a likely ‘tax grab’ by the Chancellor this year.

Paul Attridge, partner, tax adviser, based in the Hertford office of Azets, the UK Top 10 accountancy firm, predicts tougher rules could be introduced in the spring, along with the withdrawal of existing support measures.

In the last autumn budget, the Chancellor confirmed that the economy should return to its pre-Covid level. Unemployment is also at a lower level than originally forecast – which is expected to peak at 5.2% instead of the 12% previously forecast – while the Office for Budget Responsibility forecast for business investment has also increased.

Despite a business-friendly budget, Paul Attridge foresees new challenges for SMEs, with inflation expected to average 4% next year and demand outstripping supply in most industries, leading to manufacturing delays and product shortages.

Many SMEs are also struggling to recover after the end of the furlough scheme and increased energy needs which are weighing on prices and doubling the global cost of oil and gas.

Paul Attridge said: “The Chancellor has presented a relatively optimistic autumn budget, but further challenges lie ahead and for many SMEs the support measures available today will not be enough to offset rising bills. over the next 12 months. SMEs should seek professional advice to ensure they take full advantage of all available allowances, with inflation set to continue to rise and the extended stimulus loan program ending on June 30, 2022.”

Rishi Sunak announced the extension of the Recovery Loan Scheme (RLS) in the fall budget, making it possible to finance SMEs at a reduced cost and to make available loans that lenders would find it difficult to fund under their daily policy of “business as usual”,

The Chancellor also announced a series of reductions in business rates, with the retail, hospitality and leisure sector benefiting from a 50% reduction on business rates, worth around 7 billion of pounds sterling.

Paul Attridge urges SMEs to take advantage of these schemes, with increases of 1.25% in National Insurance contributions already confirmed from April 2022 and corporation tax rising from 19% to 25% from April 2023, as well as planned changes to Inheritance Tax (IHT) and Capital Gains Tax (CGT) following recent simplification reviews by the Tax Simplification Office.

He highlighted additional steps businesses can take now to optimize their financial position:-

  • Take advantage of the Annual Investment Allowances (AIA), which will continue at their current rate of £1m until March 31, 2023, helping businesses invest
  • Consider selling assets and stocks as soon as possible while Business Asset Disposal Assistance (formerly Entrepreneur Assistance) is still available to help reduce CGT
  • Continue to invest in research and development (R&D), with the R&D tax relief scheme expanded to include cloud computing and data costs, and a refocusing of relief towards innovation in the UK announced, targeting national R&D spending from April 2023.

Paul Attridge added: “Businesses need to plan ahead, with spring fast approaching and no confirmation on what additional measures may be introduced in the next budget. The surge in public borrowing and the continued rise in interest rates will force the government to increase tax levies to meet crippling costs. As always, SMEs could be the hardest hit and need to optimize their financial situation for a possible tax bite as early as April 2022.”

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