A defence of people who go into business to make profit has been sounded by the chancellor, in a vindication company bosses have welcomed ahead of his Autumn Budget 2017 next month.
Speaking to the Conservative Party conference, Philip Hammond praised the free market economy, saying it “frees people and business, encourages them to create, take risks [and] gives ideas a go.”
He also said that “the profits from such businesses…underpin our savings and our pensions,” and stated that it is their taxes which “in the end, pays for our public services.”
Alongside the chancellor nodding to the UK’s “phalanx of entrepreneurs” who exploit “breakthrough technologies”, the vindication was welcomed by the Institute of Directors.
But on behalf of company bosses, the IoD says Mr Hammond needs to do more. “There was little red meat for business”, it said. “He must back up his support for business in the upcoming Budget.”
So the lobbyist wants tax changes on November 22nd to boost “entrepreneurial companies,” by raising the Annual investment allowance cap to £1m, and easing restrictions on reliefs for investing in start-up companies.
The institute regards these reforms as necessary after it found that companies’ investment planning has fallen into negative territory for the first time since the UK’s Brexit decision
The IoD is also calling on the chancellor to use the Autumn Budget to:
·Improve the interface between HMRC and companies, so that the perception of tax planning being undesirable or unacceptable is headed off.
·Implement broad-based simplification of the tax system faced by businesses.
·Align taxation with the flexible labour market, “so that taxation considerations do not take precedence over more important commercial choices.”
·Launch a Tax Commission to report upon “the impact of the flexible economy upon tax revenues.”
·Task the commission to ensure “a level playing field” is established between the employed, the self-employed and the established/traditional and new/digital economies.
This wishlist was submitted to Mr Hammond after he was challenged by Labour to take on John McDonnell, shadow chancellor, in a live TV debate on economic policies.
However, the chancellor made no mention of the challenge in his speech, which he used to trumpet Britain’s “leading role” in robotics, AI and Big Data, and which announced an extra £10billion in funding for loans under Help to Buy until 2021.