"Leave pensions alone", "do not hike IHT" and avoid "burdening small businesses with more costs and red tape"

LEAVE pensions alone, do not hike IHT, avoid stealth taxes and do not burden small businesses with more costs and red tape, are just some of the warnings business owners have given the Chancellor ahead of the 26 November Budget as she seeks to plug the £50bn fiscal black hole.

Instead, they urged Rachel Reeves to recognise that the economy is on its knees and to attempt to create a feel-good factor again, which has been missing for too long.

Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, urged the Chancellor to “please leave pensions alone. Politicians love tinkering around and it's complicated enough already. It's in the country's interest for people to fund themselves in retirement and pensions are the logical vehicle for that. We need political leadership that gives confidence and trust in the pensions system".

Colin Crooks MBE, CEO at Intentionality, said Reeves should not pile even more pressure on small firms: "Whatever the Chancellor announces at the despatch box on 26 November, she must not burden small businesses with more costs and red tape.

“Small businesses are the job creators that sustain our communities but they can only take so much and many are already close to breaking point."

Sam Kirk, Managing Director at Retford-based J-Flex Rubber Products, said stealth taxes must be avoided at all costs: “The Chancellor must not resort to stealth taxes. Hidden charges always end up hitting the wrong people and businesses, and the cost still filters down to working households.

"If revenue needs to be raised, just be upfront and pull the most effective levers. Manufacturers can plan around clear and open taxation but hidden taxes damage trust, erode competitiveness and stifle growth.”

Scott Gallacher, Director at Leicester-based Rowley Turton, said raising IHT would be catastrophic and drive wealth creators overseas: “The Chancellor must avoid dragging us back to the dark days of death duties by hiking Inheritance Tax. Such a move would be a further barrier to families and entrepreneurs investing in the UK, at a time when we need to build confidence, growth and long-term planning — not penalise those who’ve worked hard to build wealth. Otherwise, we risk driving the very strivers we should be supporting to look overseas.”

For Keith Budden, Managing Director at Liss-based Ensurety, the Chancellor must not tweak the VAT regime: “Reeves must avoid any temptation to extend the scope of VAT or to bring VAT on energy bills in line with mainstream VAT. For businesses, she must not lower the VAT registration threshold.”

Ross Lacey, Director at Rayleigh-based Fairview Financial Management, also advised the Chancellor to steer clear of pensions: “She should not make any more negative changes to pensions, such as reducing the tax-free lump sum from 25% and reducing tax relief on contributions. Pensions already suffer an image problem and the constant tinkering threatens to make them even less appealing to the public.

"In reality, they are a fantastic engine to power retirement so I recommend the Government leaves them untouched.”

Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial, said such a late Budget suggests the Chancellor is all out of ideas: “Reeves has asked to hand her homework in late, as she doesn’t know the answers. 26 November is an unprecedented late Budget and she’s scrambling around for inspiration. We know what can’t be in the Budget; her three golden taxes. However there is a possibility that one of these might be broken as she’s nowhere left to go.

"She might also change her borrowing rules. What we don’t want to see is any more burden on business. Everyone, besides the Chancellor, seems to know British business is the way out of this crisis but hiking taxes, minimum wage increases and stricter regulation is a sure-fire way to strangle off growth.”

Rohit Kohli, Director at Romsey-based The Mortgage Stop, said further taxing business could prove fatal: “The Chancellor must not seek to plug the gap by raising taxes on businesses. You can’t talk growth then drain the firms that create it. It’s like filling a pothole by digging up the rest of the road: you end up with a bigger hole and traffic at a standstill.

"Higher business taxes delay investment, freeze hiring and shelve pay rises, which drags on productivity and leaves receipts weaker for longer. If the aim is revenue, give firms certainty and make investment more attractive.

Aaron Strutt, Communications Director at London-based Trinity Financial, kept it brief: “The Chancellor has to avoid damaging confidence in the economy even more. We need a feel-good factor again because it’s really not there at the moment.”

For Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, the Chancellor should look in the mirror: “Recognise the economy is on its knees and don’t bury it completely with yet more tax rises. We need to promote economic growth, which means encouraging businesses, not tying them up in ever more taxes and red tape.

"Of course, without a single tax cutter in either 10 or 11 Downing Street and precious little actual business experience in this Labour government, the best we can all realistically hope for is a ‘not-as-bad-as-expected’ Budget come 26 November. Last one out, switch the lights off.”