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.
HMRC have proposed a new criminal offence for making reckless, untrue statements or declarations about what's known as 'direct taxes' - Income Tax, National Insurance and the like. For Customs and Excise and VAT ('indirect taxes'), it is already possible to prosecute individuals who make untrue statements or submit incorrect documents either knowingly or recklessly, without the need to prove dishonesty. The penalties for such offences can be severe, including substantial fines and imprisonment. The direct tax regime does not currently contain an equivalent offence.
A new Freedom of Information (FOI) request has discovered that health and safety violations cost British employers over £44 million per year. The Health and Safety Executive (HSE) revealed that serious breaches have resulted in an increasing number of prosecutions between 2023 and 2025.