Finance Professionals Call On Chancellor To Act Now Or Risk Impeding Economic Growth

• ACCA has written to Chancellor Jeremy Hunt ahead of the Autumn Statement (Budget) expressing its concerns about UK economic progress for the future.
• The letter also highlights the need for swift completion of the audit reform process, incentivising investment and HMRC service improvements to help the UK economy stabilise and grow long term.

Swift completion of the incentivising investment, audit reform process and HMRC service improvements are the three key focuses of an open letter to the Chancellor from ACCA, the leading global professional accountancy body.

Ahead of the Autumn Budget Statement on 22nd November 2023, ACCA has issued an open letter to the Chancellor outlining concerns from members that it believes are ultimately impeding the UK economy. Many of the concerns raised affect SMEs – a vital part of the UK puzzle if the Chancellor hopes to restart economic growth.

Recent ACCA research found that UK business confidence was low, with 50% of Welsh survey respondents saying they felt the UK economic outlook was negative. ACCA finance professionals cited concerns around high rates of inflation, increased costs, business investment being on hold, and general global uncertainty.

In its letter to the Chancellor, ACCA highlights how incentivising business investment, audit reform and improvements to HMRC service standards form a solid base upon which trust in the economy – crucial to sustained growth – can be restored.

Incentivising and encouraging business investment remains a key focus for ACCA, with recent survey data suggesting around half of UK respondents report access to finance is harder now than 12 months ago. The letter underlines the value of business innovation incentivised through making permanent the full expensing on capital allowances and improving R&D tax reliefs, though notes improvements are required to this system. ACCA goes on to highlight the unintended impact on business investment from freezing tax thresholds and introducing additional complexity, including to corporation tax, suggesting that this potentially adds additional barriers to growth.

On audit reform, ACCA calls for swift completion of the much-delayed audit reform process, underlining that the recent withdrawal of the proposed corporate reporting regulations was disappointing. In the letter to the Chancellor, ACCA highlights that a robust audit system – one that puts the onus on directors of companies, as well as audit and finance professionals – is needed to achieve a best-in-class regulatory system, which is a vital part of any financial ecosystem.

In its correspondence, ACCA also reiterates issues of “unacceptably poor service” from HMRC, citing recent data which revealed more than 90% of finance professionals wanted to see improvements to HMRC services, enabling them to work more efficiently by resolving queries more quickly, freeing up time better advise businesses on growth and investment activity. ACCA suggests the upcoming Autumn Statement presents an opportunity to properly invest in HMRC, with a focus on improving customer service and effectiveness, so it can help both improve public sector finances and boost productivity in the UK as a whole. The professional body highlights that a plan for sustained improvement and investment in HMRC would help to restore trust between government, finance professionals and the businesses they represent – a cornerstone to attracting and encouraging business investment in the UK.

Lloyd Powell, Head of ACCA Cymru/Wales, said: “While the Chancellor will rightly be focused on issues such as taxes, inflation and interest rates at the upcoming Autumn Statement, it’s also important to focus on getting the right framework for growth, including restoring trust in our corporate governance reforms, fixing HMRC and getting investment incentives right. Improvements in these areas will be key to boosting productivity.

“HMRC service concerns in particular cannot be overstated. An effective, efficient tax system, which delivers for SMEs, must be at the heart of a successful economy. While we recognise the Chancellor has many competing priorities, announcing improvements to HMRC would be a valuable step to restore trust and kick-start business confidence.”

Visit ACCA’s website for more information.