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Businessmen seek carrot in the Budget

19th January 1980
Page 17
Page 17, 19th January 1980 — Businessmen seek carrot in the Budget
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Which of the following most accurately describes the problem?

SMALL businessmen want the Chancellor of the Exchequer to cut tax burdens to provide greater work incentives and to discourage moonlighting.

The Association of Independent Businesses has written to Sir Geoffrey Howe calling for a £1000 increase in personal allowances as part of this year's Budget package.

AIB taxation committee chairman John Critchley said: "At present, taxation starts at a very low level of income. In fact, a person can be liable to pay tax and, at the same time, be eligible for social security benefits — a frightening anomaly.

"Many people are reluctant to earn more when they see so much of their extra pay going in tax or being eroded by the loss of social security benefits."

Mr Critchley continued: "A man or woman could take a better paid job giving an extra income of, say, £20 a week. If they lose family income supp lement, rent and rates rebate, free school meals and so forth and pay extra tax, they could end up with a very minor improvement in net income."

AIB's proposals, he insists, will increase people's incentive to earn more and will make jobs in the black economy — that is, tax evasion or moonlighting — less attractive.

"It would also have the added advantage of removing some four million people from the tax system completely, thus easing the load on the Inland Revenue and on wages staff throughout industry," Mr Critchley went on.

AIB also wants Capital Gains Tax, Development Land Tax, and Investment Income Surcharge to be abolished, and for a more equal tax relief system to be agreed for the self employed.

It proposes changes in close company legislation, Corporation Tax, and Capital Transfer Tax, and wants an increase in the tax concession on luncheon vouchers.


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