ICAEW Says Stability in the Tax System Needed to Support Entrepreneurship
The Institute of Chartered Accountants in England and Wales (ICAEW) has said that doing business in the UK is too uncertain and expensive, and more stability in the tax system is needed. Their comments were in response to the government’s call for evidence on how the tax system can better support entrepreneurs.
ICAEW considers that blunt tax hikes and tax policies have disproportionately increased the cost base of UK businesses and these need to become a thing of the past.
They also point to a lack of meaningful incentives that would unlock investment from serial entrepreneurs and family office investors. For instance, an outright capital gains tax exemption could be more effective in encouraging the reinvestment of capital into new ventures.
Recent changes to the inheritance tax and domicile rules have also complicated reinvestment decisions and may tempt some to move funds abroad.
From April 2026, the income tax relief that can be claimed by someone investing in a venture capital trust (VCT) will be reduced from 30% to 20%. ICAEW have called for this decision to be reversed.
ICAEW have suggested that changes also be made to the enterprise investment scheme (EIS) and enterprise management incentives (EMI) to make them more effective and attract talent to entrepreneurial businesses. The government’s call for evidence closed on 28 February 2026. It will be interesting to see what changes come from the consultation.
UK businesses are facing a “cost of business crisis”, according to the British Chambers of Commerce (BCC). Its new cost-stack calculator shows government policy alone has pushed up an average firm's expenses by 70% over the past decade, adding roughly £827,000 a year in costs for a typical mid-sized business. About a quarter of the rise stems from the increase in employer National Insurance contributions, with the higher minimum wage and mandatory pension auto-enrolment also major contributors.
Under Making Tax Digital (MTD) for Income Tax, sole traders and landlords with income of more than £50,000 have been required to keep digital records and send quarterly updates to HMRC since 6 April 2026.
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