Tax changes announced in the budget equate to £54.5bn ($66.8bn) in tax over the next five years, a sharp fall from the £222.2bn of tax changes announced in Kwasi Kwarteng’s ‘mini-budget’, says Thomson Reuters.
The £54.4bn of changes are spread across 40 tax changes. By contrast the September budget changes related to just 15 tax policies. The average number of tax changes announced in budgets over the last decade is 32.
Thomson Reuters general manager, tax & accountancy professionals, Simon Brookings, said: “Today’s statement marks a return to the scale of budgets observed pre-pandemic, with the value of changes close to those in the Spring 2020 statement.”
Brookings further said that corporates face challenges in navigating the UK’s increasingly complex tax regime whilst growing their business.
Brookings commented: “Long term, reducing the administrative burden of dealing with taxes in the UK will be important. Having an easy to navigate tax system is also important to businesses looking to set up or expand their operations in the country.
“Changes to tax over the next five years are considerable and accountancy firms will have to assimilate to 40 new tax policies. The financial risks of getting it wrong mean businesses are having to invest more in the technology needed to navigate tax compliance to ensure they don’t inadvertently fall foul of HMRC.
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“The Government wants to see UK businesses lead the way on AI and tech innovation. Offering more generous tax reliefs would go a long way towards incentivising businesses to invest in AI and other data powered software. In turn this technology could make navigating tax changes significantly easier”.
The ‘mini-budget’ was followed by an ‘emergency budget’ in November 2022, with £287.4bn of changes. These largely comprised changes to tax policy decisions made by then Chancellor Kwasi Kwarteng in September 2022.
Brookings concluded: “For accountants we encourage them to regularly review the software and tools at their disposal to ensure they make technology work for them to help navigate the complexities of tax changes. Furthermore, our Digita solution can be used by accountants to calculate the impact of the Budget changes on individuals. It’s this sort of added value technology that can enable accounting firms to provide proactive advice to their clients.”