The chief executive of the Institute of Chartered Accountants in England and Wales (ICAEW) has warned that Labour plans to further devolve tax powers would damage businesses.
Michael Izza spoke yesterday to shadow business secretary, Chuka Umunna, warning him that additional burdens should not be placed on businesses in the wake of the Scottish referendum.
“In the aftermath of the Scottish referendum and promises made to devolve tax and spending, we must be careful not to add to the regulatory burden facing business or greater complexity to the tax code.”
The Scottish independence referendum has sparked debate over increased devolution, with both Commons’ communities and the local authorities committee supporting the idea.
A report by thinktank, ResPublica, explored devolving tax powers to the Greater Manchester area, saying that these measure could turn fortunes in the area and lift the population “out of the doldrums”.
However, the ICAEW say that HMRC are already under too much pressure with budget cuts and commitments to Real Time Information and Universal Credit, and that introducing a system of alternative regional tax systems could push the Revenue to breaking point.
Mr Umunna acknowledged these issues, but stood fast with his commitment to break up Whitehall’s powers and give regions and cities more tax independence.
Image by Richard Hayes