Philip Fisher's 2021 fantasy Budget for the peopleby
Philip Fisher presents a radical Budget speech, drafted with the intention of promoting a series of strategies inspired by a government as keen on soundbites as actual policies.
Madame Deputy speaker, this Budget contains measures designed to promote levelling up, climate change and Global Britain, while also seeking some simplifications to today’s ludicrously complex raft of tax legislation and protections to recover lost taxes that have resulted from that complexity.
Simplification and protection
As a first measure, it seems sensible to remove as many people from the tax system as possible. Therefore, I will increase the income tax threshold and that for NIC to £20,000.
In the fullness of time, it will also make sense to merge income tax and employee’s national insurance contributions. To this end a consultation paper will be issued as a first step later in the week.
Next, the Treasury solicitors will be asked to reduce the volume of tax legislation by 1/3 before the end of the current Parliament. In doing so, they must also balance the books.
HMRC staffing is to be expanded by 50%, with all new recruits dedicated to stamping out abuses and recovering tax that has not been accounted for correctly. This investment will more than pay for itself within 12 months.
To date, the most significant contribution that this government has made to climate change comes in the form of the amount of hot air emitted by its ministers, which has reduced heating bills at Westminster.
If we are to achieve the climate change goals that the great and the good say so much about, then serious change is required.
To this end, the amount of petrol and diesel used must be reduced significantly and the easiest way to achieve this is a new way of calculating fuel duty. From midnight tonight, this will become a very simple 25% of the cost of fuel. All revenues raised will be applied towards funding home insulation.
The same will apply to a new windfall tax. There is very little doubt that those who have benefited most from recent government subsidies should begin to pay them back to shore up the big black hole in the country’s finances.
Since the most significant of these handouts has been the stamp duty land tax reduction, which missed its target by as much as some of England’s best penalty takers in major competitions, there is an obvious solution.
With effect from the beginning of the current tax year 2021/22, Principal Private Residence Relief will be removed. To mitigate the position for those that are genuinely climbing the housing ladder, there is a plan to introduce a rollover relief from the same time, details of which will be published in due course.
In addition, stamp duty land tax rates will be doubled with effect from the beginning of the next tax year.
Everybody in this country will have heard our esteemed Prime Minister pontificating at length about Global Britain, though the rest of the globe doesn’t seem to have noticed.
In order to take us a step closer to achieving this laudable goal, non-domicile status will be removed with immediate effect. This should bring in significant sums to the Exchequer and, if the naysayers are correct, force many rich, criminal types to flee our shores. On the basis that few of them ever pay tax, that will hardly be a great loss.
Because this government is so determined to make use of the term “levelling up” in every broadcast and interview, it is deemed appropriate to introduce a couple of measures that will help to paper over the cracks regarding what might otherwise appear to be nothing but a tidy slogan.
First, it is unclear why national insurance contributions, which are nothing more than a supplementary form of income tax should be reduced for those earning large sums of money and, as outlined above, a merger with income tax will take place in due course.
Ahead of that, from next April, employee’s national insurance contributions will no longer be reduced to 3.25% on earnings above just over £50,000. For the avoidance of doubt, this means that all employees will pay 13.25% on all remuneration over £20,000. In parallel, the self-employed will pay NIC at this rate without any upper limit.
Universal Credit U-turn
Finally, it brings tears to any Chancellor’s eyes when he sees impoverished neighbours earning little more than the National Living Wage struggling to survive, especially those with (at least) half a dozen kids and another on the way.
Therefore, in compliance with the strict obligation to include at least one U-turn in any ministerial statement, there is to be a limited reversal of the highly commendable decision to take away the increase in Universal Credit from the poorest workers.
To help those most in need, this reversal will not lead merely to a £20 per week increase, nor even £200 but quite staggeringly generous £2,000 per week.
Since this could break the bank of UK plc completely, as part of the levelling up agenda it will have limited but still widespread geographical effect, applying to anyone living in the SW1A 2AA postcode.
I commend this Budget to the House.
Want to keep up with the latest on the Autumn Budget? Rebecca Benneyworth, Peter Rayney, Paul Aplin, Anita Monteith and more will be discussing the announcements and what it means for your clients at AccountingWEB Live Expo. Registration is now open for the 1-2 December 2021 exhibition at the Coventry Building Society Arena.