Deloitte is calling for an unlimited three year tax loss carry-back provision
in tomorrow’s Budget.
Partner Bill Dodwell said the three year loss carry-back introduced in the
pre-budget report in 2008 contained several shortcomings.
The relief in its current form is worth less than £10,000 for most companies.
To compound the situation, many companies are only able to claim for year ends
between 24 November 2008 to 23 November 2009. This suggests they may not be able
to offset losses if the financial crisis carries on for many years.
Deloitte also wants an extension to the Business Payments Support Service. At
the beginning of April, £1.8bn had been advanced under the scheme to over
100,000 taxpayers. Deloitte says these and more businesses will require further
More support needs to be provided to savers, and Deloitte says it should be
tax-free for pensioners whose investment income has been destroyed. It estimates
that tax relief on interest rates of 1 per cent would cost the government around
On the uncomfortable topic of tax rises, Deloitte says the VAT rate could be
upped to 18.5 per cent, which would raise over £5bn and cost an average income
earner on £25,000 just £1 per week.
By contrast, putting up the top rate of tax to 45 per cent for those earning
over £150,000 would raise just £670m in the first year.
Does Darwin's theory apply to taxation? Colin ponders...
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Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group