RSM Tenon lobbies Government on tax credits

A BIRMINGHAM tax specialist is arguing that a positive climate for entrepreneurial investment may be closer than people think.

Iain Wright, accountancy firm RSM Tenon’s tax director in Birmingham, says that although the 50p tax rate looks like being retained, there is increasing evidence that the Government is trying to use the tax regime to encourage entrepreneurs to play a frontline role in economic revival.

He has welcomed measures which come into force from April are aimed at encouraging more investment in a wider range of businesses through extended tax relief, relating to the existing Enterprise Investment Scheme [EIS].

Wright said: “Clearly, entrepreneurs are going to remain cautious in the current uncertain climate, but this helps make it easier for them to invest in the broad swathe of the economy that has to play a key role in driving growth.”

But RSM Tenon believes more can be done and to this end has launched an e-petition on the Government website calling for tax credits of up to 25% for entrepreneurs who take on additional employees.

Wright said: “There are some 4.5m private sector businesses in the UK, many of them in the Midlands. They are the lifeblood of the economy and they represent the best chance we have to get employment and growth moving again. We have already seen substantial concerns voiced about the impact of the 50p top tax rate and our view is that Government must find ways of rebalancing a relationship between entrepreneurial risk and reward which is out of kilter.

“Providing tax credits which allow entrepreneurs to create jobs would cost the government nothing. It would take people off benefits, increase the numbers of people paying tax, and encourage consumer spending. Crucially, it would make entrepreneurs feel as if their contribution is recognised and encouraged.”