Press Release
Comment from ACCA on income tax rate changes
13 May 2008
Chas Roy-Chowdhury, head of taxation at ACCA (the Association of Chartered Certified Accountants), offers the following comments in response to the Chancellor’s statement today about income tax changes:
“The Chancellor’s increase in the individual tax allowance by £600 is to be welcomed. Tax payers have been demanding certainty and clarity about this issue, and this is a step in the right direction.
“But the downside to this income tax change is that business’ systems and processes will have to be updated half way through the tax year in September. SMEs represent over 99% of UK businesses, and they will have to change their PAYE codes and tax systems. This is the administrative knock-on effect which happens when policy decisions are altered because they were not clearly thought through in the first instance.”
“ACCA also questions how many tax payers will now be dragged into the higher rate tax band of 40 per cent. Due to these changes, there will now be people who were on the 20 per cent tax band who will be brought into the higher rate because of this £600 decrease in the 40 per cent tax band.”
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