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My Budget wish list

18th Mar 2013
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Another dose of George's marvellous medicine this week. I suspect I'll need more than a spoonful of sugar to digest it!

What I really want to see is something to immediately boost business for SMEs in my area. I don't want jam tomorrow and vague promises of tax breaks in the future. So I'd certainly go along with a writer in one of the Sunday papers who suggested that SMEs should be exempt from Employer's NICs, provided that was effective from 6/4/13 or soon afterwards. I also agree that giving people "stealth allowances" in the form of gradually increasing personal allowances achieves very little of real value. Most people barely notice the difference - it's certainly not motivating or likely to encourage economic recovery, and yet it costs a fortune. A cut in the VAT rate would be far more welcome.

AIA is high enough for most of my clients, so I'm not looking for more capital allowances, and frankly both basic rate Income Tax and small company Corporation Tax rates are low enough. I know I was only at school at the time, but I still remember that marginal income tax rates were over 100% in the 1960s, so 20% basic rate and a top rate of 45% doesn't look so bad to me.

What my clients want is a boost to the economy in general. Public capital expenditure on construction and infrastructure provides jobs for many - and it puts wages in workers pockets (which will bear PAYE and NICs) to go out and buy stuff with VAT on. That's all good for business generally.

Interest rates? No-one really cares because they can't borrow! The Government is going to have to find ways of lending direct to SMEs, or providing grants or something because the banks have effectively shut up shop as far as most businesses are concerned. It would be nice to see something significant on this, but I'm not optimistic.

The big problem this year is that George and Dave need to keep their options open for a big pre-election Budget next year, so I'm really not expecting any good news this week. "Under promise and over deliver", that's the plan I reckon - paint as bleak a picture as they can, minimal good news, and then next year if things are better than we feared they will look like heroes! Works every time.

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