David Cameron reveals all
The Tory leader has laid out when the second Budget will be next year and some of what it will contain if a new Conservative government comes to power.
David Cameron announced 2010’s second Budget of the year before Mr Darling has had chance to deliver the pre Budget report – let alone the 2010 Budget. He did add that the general election next year would be a hard fought battle, but he promised a Budget within 50 days of being elected if the Conservative party win the general election (which must be held before June).
Continued...
The full article is available to registered AccountingWEB members only. To read the rest of this article you’ll need to login or register.
Registration is FREE and allows you to view all content, ask questions, comment and much more.
Or if you are already registered, login here
Of course
I agree that in theory capital allowances should be a cash flow benefit only but anyone who practised through the early 1980's will know that in effect the 100% allowances available at the time became a permanent deferment of tax rather than merely a timing difference based on continued investment. (Witness the games with deferred tax at the time)
In any event, the way that the Red Book is put together is based on annual cash flows, so that a one year delay is shown as a cost in that year. However, it would probably be true to say that abolishing AIA may well yield the sort of sums I have quoted year on year because of the continued investment described above. Not all businesses will invest every year but we might imagine one quarter of the economy investing every four years on average, for example.
I wouldn't like anyone to think that I think that this or indeed any other proposals put forward by parties is a good idea, my object was to observe what parties are saying and thus draw conclusions from it that might be useful to practitioners in giving advice to clients. Such as this year might be the right time to invest in equipment as AIA may not survive. I picked on AIA because it was really the only component of capital allowances that I could see that could in any way fit the cost. I agree with Simon - it was a brilliant simplification but may yet prove an expensive luxury.
AIA
Oh Rebecca !
The AIA is one of the best pieces of simplification for small business in years, so let's hope we don't have to go back to calculating capital allowances for the 2.5 million smallest businesses.
And massive simplification ? Every party in living memory has promised that, and working with the Admin Burdens Board has shown me just how difficult it is.