BDO urges Government to pursue growth through tax simplification at Budget 2026

Simplifying the tax system will be one of the most effective steps the Government can take at the Budget to reduce the regulatory burden and support growth in every postcode, BDO has urged.

In its response to the Treasury’s call for Budget submissions, the accountancy and business advisory firm sets out a number of practical recommendations to reduce the burden on businesses to help drive economic growth.

The recommendations include:

• A moratorium on business tax rises and new administrative burdens until the end of the Parliament
• The simplification of the corporation tax system, including the removal of marginal rates. BDO is proposing a phased move to a single rate of 21 per cent, just below the EU average, to encourage businesses to bring forward investments, reduce uncertainty and lower compliance burdens
• The smoothing of cliff edges in VAT, business rate relief and the apprenticeship levy which distort investment, hiring and expansion decisions
• Extending the Enterprise Investment Scheme to serve scaling businesses better, together with a more realistic annual subscription limit to encourage more founders to stay and build rather than sell
• Introducing a lower rate of Capital Gains Tax on disposals after long-term business ownership and full relief for entrepreneurs reinvesting in another business to recognise the value of long-term business building
• Extending the benefits of the Foreign Income and Gains regime to encourage overseas entrepreneurs to invest and stay in the UK.

Jonathan Hickman, a tax partner at BDO said: “It’s pleasing that the Prime Minister has recently acknowledged that the cost of doing business has become a real challenge.

“As a minimum, businesses want assurances that they will not face further business tax rises in this Parliament. But we believe there is so much more that the chancellor could do to ease the administrative burden built into our complex tax system.

“We recognise that the chancellor’s room for manoeuvre is limited. However, there is definitely scope to smooth distortive cliff edges and reform incentives to encourage long term investment, help scaling companies and attract more entrepreneurs to invest and stay in the UK.

“The chancellor has already promised a 25% reduction in the burden of business regulation by the end of this Parliament: he should start in this Budget by simplifying the tax code to drive growth in every postcode.”

Please see here for a full list of BDO's considered Budget predictions.
 

ENDS

Note to editors

BDO LLP operates in 19 offices across the UK and Ireland, employing 8,500 people. It has revenues of £1.1bn.

It provides Audit, Tax, Deals, and Consulting, Risk & Outsourcing (CR&O) services predominantly to the entrepreneurial, ambitious and growing mid-sized businesses that are driving growth in the UK and Ireland economies.

BDO LLP is the UK and Ireland member firm of the BDO Global network.

BDO Global

The BDO international network provides business advisory services in 169 countries and territories, with 95,000 people working out of 870 offices worldwide. It has revenues of US$11bn.

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Frank Shepherd
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