I wasn't expecting that...
Looking too closely at the detail on Budget day can sometimes obscure even bigger news stories, complains John Stokdyk.
If truth be told, the AccountingWEB editorial team wiped its collective brow last Wednesday evening and concluded over a post-Budget pint that it had been a relatively snag-free day.
Among the small business world we mainly inhabit, the corporation tax rate continued what has become something of a Tory tradition. As well as being reasonably straightforward to implement, it had the added benefit of returning a bit of cash to hard-working businesses.
Some of the capital gains tax proposals carried with them the prospect of yet more complicated conditions and as Wendy Bradley has since pointed out, the Lifetime ISA and other changes to personal allowances and dividend taxation are making decisions about remuneration increasingly complicated for small income, high marginal rate taxpayers (aka pensioners).
But overall the good news from Osborne’s budget for small business was reaching the intended targets.
When the Chancellor mentioned disability benefits in his speech, I switched off slightly. This isn’t usually the sort of issue that troubles accountants much. And, like the CT rate cut, seemed to be a continuation of a Conservative manifesto commitment.
How wrong I was. The first inkling that something was up came the next morning when I heard Labour shadow chancellor John McDonnell castigate the Chancellor for taking benefits away from disabled people while giving cash back to “rich people” who pay capital gains tax and corporation tax.
That stance is to be expected, but who knew that Iain Duncan Smith would then sacrifice his cabinet career to take on his new guise as a champion of social justice?
Onlookers from the cabinet table to Fleet Street suggested that IDS was motivated less by egalitarianism than by an urge to torpedo the Cameron-Osborne campaign to remain in Europe. But whatever his reasons, the fallout from this Budget makes 2012’s pasty-gate “omnishambles” look like pile of tabloid fluff and may have scuppered the Chancellor’s hopes of moving into Number 10.
There’s an interesting sideshow here for HMRC-watchers, since Duncan Smith is also the prime architect of the epically late universal credit system. Could his departure also be a sign of frustration on his part that UC isn’t going to play out as promised? Just to confirm how narrow-minded journalists can be, that immediately raises questions here about the state of the RTI project and how many more bits and bobs of deduction and payment information the government is going to try to hang off that creaking mechanism.
At least I wasn’t the only one. When asked about the weekend’s political dramas, our tax editor Rebecca Cave wondered if the outrage might cause the government to row back on its planned CGT reforms: “That would at least mean I won’t have to rewrite my CGT books - again.”
You might also be interested in
AccountingWEB’s interim Editor in Chief has been with the site since 1999 and returned to the editorial hot seat in March 2020 to lead the hunt for a long-term successor... Send a DM if you're interested! When not tending to the needs of AccountingWEB members and geeking out on their technology habits, he devotes much of his time to his oddball...