Chancellor Philip Hammond has defended people who go into business to make a profit, saying that the free market economy liberates people and businesses whose taxes pay for the UK’s public services.
Speaking at the Conservative party conference, Mr Hammond said that free enterprise encourages entrepreneurs to create, take risks and give ideas a go, while their hard work underpins the country’s savings and pensions.
The Chancellor’s words were praised by the Institute of Directors (IoD) but the organisation said that he needs to do more and that he must “back up his support” in next month’s Autumn Budget.
According to the Institute, Mr Hammond should implement tax changes on 22 November as this would boost entrepreneurial businesses by raising the Annual Investment Allowance cap to £1 million, and by easing restrictions on reliefs for investing in start-up companies.
The IoD regards these reforms as necessary after it found that companies’ investment planning had fallen into negative territory for the first time since the UK’s Brexit decision.
The body is also calling on the Chancellor to use his Autumn Budget to improve the interface between HM Revenue & Customs (HMRC) and businesses, so that the perception of tax planning being undesirable or unacceptable is headed off.
It would also like Mr Hammond to implement broad-based simplification of the tax system faced by businesses, and to align taxation with the flexible labour market, so that taxation considerations do not take precedence over more important commercial choices.
According to the IoD, the Government should also launch a Tax Commission to report upon the impact of the flexible economy upon tax revenues.
