News and insights from the team behind AccountingWEB.co.uk. Want to know more about us? Click here to meet the team.
The Autumn Statement as political theatre
AccountingWEB editor John Stokdyk takes a few soundings and shares his dyspeptic predictions for this week's Autumn Statement.
For the past few weeks I’ve been trying to play down expectations about the Chancellor’s Autumn Statement. As far as most tax practitioners are concerned, the real meat will be revealed not in Wednesday’s big speech, but in the Finance Bill 2013 draft clauses that will be released for consultation on 11 December.
But the political furore and speculation surrounding this week’s Westminster showpiece has shaken my complacency just a little bit, and the editorial team is on standby in case George Osborne really does unleash the hounds of anti-avoidance and spring some extra restrictions on pensions contributions relief, as has been widely suggested.
Chancellors are always looking to make an impression and poor corporation tax yields have put his Plan A for reducing the deficit under the microscope. The macroeconomic pressure has been accentuated by the recent Panorama documentary on sham directors and criticism from MPs on the Public Accounts Committee on HMRC’s passive stance towards corporate tax avoiders.
Osborne has been backed into a corner and needs to show that he’s getting tough on wealthy corporations and individuals who have the means to shift their assets beyond his reach. So we’ll hear more about crackdowns on aggressive avoidance schemes (as the PAC demanded), and possibly something on pensions tax relief.
The Coalition government came to power promising a new approach to tax policy making, and thought it has inflated the amount of information that has to be absorbed through the various consultative stages, the benefits of predictability and more robust tax law are a welcome innovation. It may be dull and predictable, but we’re among accountants here and that’s the way many of them like it.
When the Chancellor has been tempted to stray off course, he’s ended up having to backtrack more often than not. I’m still hoping that some policy wonk at the Treasury has the common sense to whisper “granny tax” and “pasty tax” in the Chancellor’s ear on regular occasions.
That’s probably more than we can wish for. You can join us on Wednesday afternoon at 12:30pm to enjoy the political theatre of the Autumn Statement in our live blog. We’re hoping the ugly surprises will be kept to a minimum, and then it’s eyes down for what some insiders are now calling “legislation day” on 11 December.
There is likely to be a mini-Budget’s worth of documentation setting out large portions of next year’s Finance Bill - just the thing for some light relief from Self Assessment work over the Christmas period. Thanks to sponsorship from the CPAA, you’ll be able to take a shortcut through the documentation as Rebecca Benneyworth will review the paperwork and produce an overview report on the key policies and technical issues that will affect small business.
“The Chancellor is in a hole. There’s no shortage of advice for him, but there’s very little he can do. He’s going to have to go after the wealthy and be seen to be doing that,” Rebecca told me earlier.
“I think we may get a change on pensions - either a reduction of the maximum contribution that can attract relief, or restricting the relief to the basic rate only. It may be a challenge for advisers, particularly if he sets off a stampede by delaying it until the new tax year, but technically it’s not very complex. He could even present it as a step towards simplification.”
Register now to get your copy of Rebecca’s report on this autumn’s key tax policy announcements. Copies will be available from 17-18 December.