Business owners take huge risks and make sacrifices over the long-term … but short-term policies are discouraging investment in the UK, which will impact the accountancy profession and stunt economic growth, argues AdvanceTrack founder and MD Vipul Sheth.
Can this government support entrepreneurs? It isn’t currently – a shame, as entrepreneurialism is critical for a healthy UK economy.
A story in The Times states that the UK’s tech industry could ‘quadruple in value’ by 2032, to a staggering $4trn (£3.25bn), having recently broken the $1trn barrier to follow suit with the US and China. Tech Nation’s survey, from Dealroom data, estimated the current trajectory at $2.6trn, but this could be improved if a decline in venture capital investment activity seen in 2022 could be revered.
Tech Nation chief executive Gerard Grech called on the government to introduce entrepreneur-friendly policies and a supportive regulatory framework – or risk further erosion from the likes of France as the European tech capital.
This call-to-action for the government is important, required, and supported by AdvanceTrack.
Practices need ambitious clients
For accountancy practices to grow we need businesses – their clients – to grow. And that means that the risk-reward ratio must be attractive to entrepreneurial people – at the least, not punitive. The current tax regime, which increases the rate of capital gains tax by the amount of ‘gain’, is simply unfair.
As a business owner myself, much of that time has been far from straightforward. But the current system fails to recognise the amount of risk, the time, and the effort that has gone into getting AdvanceTrack to where it is today. People can get very rich from selling a business – and I would expect (or at least hope) that everyone wants to pay their fair share of tax. But current policies re lowering investment activity at a crucial time – and you as practitioners will suffer from that fallout – as well as the tens of thousands of jobs that will fail to be created.
If we want the UK to be a success then we need the smartest people to stay here, and play a part in growing the economy. We can’t have good businesses set up in other countries when, with some long-term planning from a policy perspective, they would have chosen us.
Accountants and their representative bodies will lobby the government when either the tax authority is failing, or the tax system is creating an adverse impact. We shall leave the former to one side for the moment (and much has been said about it already); but I would urge you to push your institute (mine is the ICAEW) to call for a progressive but attractive tax system that drives our economy towards growth – we certainly need it at this juncture.
Vipul Sheth is founder and MD of AdvanceTrack Outsourcing