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Is it that time again?

16th Mar 2014
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That time of year again when our thoughts turn to this week's Budget speech and the accompanying press releases. 

When I joined the firm our then tax partner used to travel up to London on Budget day, hang out in the Treasury press office and await the huge pile of press releases, then repair to a nearby hotel and spend the rest of the night reading them and writing his Budget newsletter, which we would print and send out to clients the next day.

With the wonders of modern technology we can now just sit at our desks and download everything we need within minutes of the Chancellor sitting down. And - generally - the technology works pretty well these days after a few crashes of the Treasury website in the early years.

Like many firms, we have given up the futile race to get the first Budget newsletter out. The big firms are welcome to that game. We get our own summary out overnight and then buy in a more detailed Budget newsletter from one of the professional publishers. Clients desperate to get the news first will have read it online or in the newspaper the next day - a lot of which is inaccurate or incomplete since the main newspapers don't see the need to draft in tax accountants to produce their copy!

The 2015 General Election is going to have a big impact on the Budgets for this year and next year. If previous election run ups are anything to go by, the approach is to pile on the bad news this year and then pack next year's Budget with good news and giveaways. Good news, in the sense that they prepare us for bad news and then announce that the bad stuff won't happen. And the giveaways are mainly things we were going to get anyway, just repackaged.

So I'm not expecting much in this year's Budget for the average taxpayer. For businesses I really want to see the Annual Investment Allowance of £250K continue after the end of 2014 - and ideally I'd like to see it doubled, or even un-capped like it used to be under 100% FYAs. A return to the £25K limit would be disastrous for many of my clients.

And I'd like to see some definitive announcement on how Government and HMRC are going to treat small and one-man companies in the long term. Are they now going to leave them alone, or is the salary+dividend route coming to an end? I partly think that our small company clients are so far below the Government's radar that they really don't care, but the ongoing uncertainty is very unhelpful. Plenty of workable solutions have been put forward on this website and others over the years, but we're still working with that uneasy feeling that the present system can't last much longer.

It's probably my age, but I'd also like to see a reversal of the policies that seem to discourage pension contributions. Capping annual contributions and pension pots just seems contrary to the Government's need for more people to save more towards retirement. Abolishing higher rate tax relief on pension contributions (while the 40% threshold is effectively frozen) should also be ruled out. On the other hand, let's scrap Auto Enrolment for all small employers, add those contribution percentages to NI and reintroduce SERPS. The administrative cost of Auto Enrolment is out of all proportion with the debatable benefits to savers. I don't expect Auto Enrolment to still exist in its current form by the time most of my clients will have to join - I'll make a note in my diary to say "I told you so" in 2018!

In the meantime I have plenty of last-minute end of tax year planning stuff to get through. Never a dull moment!

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