ICAEW warns over regional tax devolution proposals

The Chief Executive of the Institute of Chartered Accountants for England and Wales, Michael Izza, has warned the shadow business secretary not to place additional burdens on business in the wake of last week’s referendum.

Mr Izza spoke with Chuka Umunna, the shadow business secretary, during a meeting at this week’s Labour Conference and told him that the business community was growing unsettled about proposals for devolved powers during the discussion on the UK’s constitutional settlement.

He said any future government needed to be cautious about promises for devolved tax and spending powers, In particular, the idea of devolving tax-raising powers to some of the UK’s larger cities.

He said the introduction of such policies would make the UK an ever more difficult place to do trade in and would disrupt the everyday operations of UK Firms.

There have been an ever increasing number of calls for tax devolution, in recent months, including from the Commons’ communities and local authorities committee.

This was followed last week with a report from think-tank ResPublica, entitled From Devo Max to Devo Manc, which called for a piloted devolution to take place in the Greater Manchester area.

The head of the ICAEW also raised the fact that HMRC is already struggling to deliver on its business brief, thanks to issues with Real Time Information and Universal Credit, budget and staff cuts and deteriorating service standards.

He said asking the department to cope with alternative tax systems both at national and regional level could potentially be hugely damaging.

Mr Umunna acknowledged the business concerns raised about regulation and additional tax complexity, but reinforced his and Labour’s commitment to push power away from Whitehall to cities and regions.

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