www.pmw.co.uk Springtime? The UK economy has stumbled along, in the wake of our OECD peers, for far too long. What the UK now needs are better incentives for businesses and individuals to create prosperity, but the current direction of travel is one of increasing complexity in the UK tax system and an everrising tax burden. It is no wonder that many of our leading entrepreneurs and wealth generators now reside overseas and explains why some of our most successful businesses are considering a relocation in their domicile, particularly to the US. The Chancellor finds himself in a difficult position. There is likely to me more money available than previously thought because government borrowing has fallen short of expectations. But the rising acrimony and disruption of the public sector pay disputes will have a high remedial cost. There is also the imminent increase in the energy price cap to deal with. As a result, there is likely to be limited money to spend, in a way which is good value for taxpayers, on encouraging growth that will materialise in the medium to long term. This is not helpful to a government that is staring down the barrel of the next election. Quick fixes are likely to have greater political appeal, but they might not be the right choice for the UK. Nevertheless, there are some easy wins. Ripe for overhaul is the taxation of accrued UK pension benefits. The current regime penalises those that choose to work longer and accrue more to finance their retirement. This makes little sense at a time when there are too few workers to fill vacancies, a factor which fuels inflation. Childcare is another issue that requires attention if we are to get more people back into work. It is far too expensive and for many, the net reward of employment is simply not enough to provide an incentive to work. A combination of tax incentives and regulatory reform is required to provide a comparable environment to that enjoyed by workers in other developed countries. As I write this, I have no idea of what the Chancellor has in store for us. It will be interesting to see whether he is able to lay the foundations for our economy to spring back into life. Simon Lewis Chief Executive officer
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