Budget zone

Budget 2008: Simon Sweetman's budget sketch

Today, as the Chancellor spotted, is National No Smoking Day (though sadly for the makers of cumbersome jokes, not also Ash Wednesday). Now once putting 11p on a packet of fags would have been seen as cruel and unusual, but no more, I think. The smokers are beaten : if they’ll sit outside in the winter to play bingo, they’ve given up.

And there can be no surprise – and not much anger - at increases in the excise duties on alcohol, either. The proportion of the price of a pint of beer which goes in tax has fallen immensely over time. 4p on a pint is not going to make a lot of difference when I paid £2.70 for an indifferent pint of bitter the other evening (mind you it was £2.80 for a pint of orange juice and fizzy water and there’s no duty on that).

Before the event the big papers had banged on about a variety of things. The Telegraph, rather strangely, quotes the OECD study which shows personal taxes rising by describing a family with two children on the median wage of £19,856 as “middle class”, while you would think they were struggling on the edge of poverty and hardly likely to meet any of the usual criteria for middle classness (like owning their own homes or reading the Telegraph). Incidentally the OECD survey appears not to take tax credits into account, and so rather misses the point.

So you start to listen and what does it sound like ? I thought, if you were a visiting Martian and you listened to the Chancellor’s speech, would you wonder why he was apparently delivering it in a noisy bar rather than in the debating chamber of a serious legislature ? Not only do they fiddle their expenses in a positively 1980s style, but they behave like oiks as well. They didn’t all go to posh schools, so why behave as if they did ?

He may have set some new record for not actually announcing tax changes in any detail, but at least it would appear that there are no nasty surprises in the small print, and one or two small but sensible moves (allowing the writing off of plant pools of less than £1000, for instance).

Shifting now into tax wonk mode, perhaps the most important decision (I won’t say announced, because it wasn’t in the speech) is that legislation on income shifting has been put back for a year. So perhaps going to all those meetings with HMRC and Treasury and banging on about it has actually got us somewhere.

And let’s look at the other changes from the PBR. The Capital Gains proposals were mitigated by the Entrepreneurs’ Relief. The non-dom legislation has been edited to remove the rough edges – the disregard is up to £2000 a year, children will be excluded, and the £30,000 payment will rank for double tax offset purposes. So in the end the Chancellor has listened to representations on all three fronts.

There is also a document called Delivering a new relationship with business which is about SMEs and which starts by delivering a lot of information which may seem obvious to you or me, but which would not have been coming from government a few years ago. And a simplification review about tax calculations ans returns for smaller companies complete with a do-it yourself questionnaire.

Could it be that the lesson will be learned this time ? It must be better to consult first and then legislate, rather than offer legislation and get involved in hurried pseudo consultations afterwards. We shall find out. In the meantime we all have to think about income shifting again. That should keep us out of mischief.

Print Friendly Mail to Friend Post Comment