Snap General Election called – Accountants react

Accountants and business groups were quick to react to Theresa May’s decision to call a General Election and considered that five different aspects of the economy could be affected.

Making Tax Digital

The progress towards MTD has already suffered a number of setbacks and tax professionals pointed out that the election will increase further the delays toward full implementation. For example, a number of regulations due to come before parliament were shelved until after the election and the Treasury Select Committee has called off further meetings scheduled to take evidence from a range of businesses. Some accountants expressed the desire that the election was a good reason to scrap MTD altogether while others pointed out that its long term future was dependant on who won the election. Within days of the election being announced, MTD became a political football with the Labour leader Jeremy Corbyn announcing that, if elected, he would pare down MTD and could consider scrapping it altogether.

Budgets

The Chancellor had indicated that the next Budget would be in November 2017. However, there is no certainty that he would retain his post, even assuming that the Conservative party won the election, as predicted by many political pundits. A number of tax professionals considered that, if a different person was appointed as Chancellor, there was every possibility of an emergency budget being called soon after the election.

Finance Bill

This was going through its second reading when the snap election was announced. The Finance Bill is so complex that it seemed unlikely to be completed before parliament rose. Opinions were divided as to whether it would mean that the Bill would be watered down to a few clauses to get it through in time or put on ice until after the election.

Tax Locks

This was another area which caused a lot of comments on social media as accountants reacted to the news of the snap election. The Labour Party had pledged to retain the triple lock, whereas there is uncertainty about the Conservative Party’s current position. Comments included queries about whether tax locks would be mentioned in the Conservative’s manifesto or whether the election would be an opportunity for them to abandon the pension lock.

Exports

Opinion was divided about how exports would be affected by the election. Depending on who won, the decision may affect whether a hard or a soft Brexit option was taken. A Conservative win would strengthen negotiations with the EU, whereas a win by an opposition party could well re-open the referendum debate.

Overall, the announcement of an election was an opportunity for tax professionals to air a number of concerns about the economy and to highlight potential outcomes, depending on the result.

Reference: http://www.accountingweb.co.uk/tax/hmrc-policy/election-threatens-mtd-timetable

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