Today, I was expecting to write a sharp and incisive analysis of the most significant tax-related measures in yesterday’s Budget. Regrettably, Philip Hammond has done me few favours with an anodyne series of humourless jokes and political jibes but very few policy announcements.
For those in the business, the most significant measures are probably those that represent reiterations of previously announced policies. For example, there are more details about the anti-avoidance measures extending the scope of the disguised remuneration legislation and, particularly, confirming that the treatment of outstanding loans as remuneration from April 2019 is to go ahead, as is the bank levy re-scope. Readers will recall that these are a couple of the many measures which had to be shelved when Theresa May called her ill-fated (unless you are a Labour supporter) general election earlier in the year.
Beyond that, from a tax perspective, the most interesting changes are way off, as a series of consultations and information gathering exercises have been announced with little prospect of action in the near future.
For me, the stamp duty giveaway is a classic example of a Chancellor trying to sound generous while helping almost nobody. Overnight, the OBR has helpfully pointed out that this will merely increase house prices. Some might uncharitably argue that since this is good news for the wealthy at the expense of the younger and poorer members of society, it will be great news for Tory voters. Personally, I wouldn’t want to do that.
Realistically, I don’t expect this change to a 1% charge to make the slightest difference to investment decisions by any prospective first-time buyers.
As a commentator, you know that you’re in trouble when the standard increase in the personal allowance and higher rate threshold are noted as a key change on the BBC website. While these are relevant and welcome, they are about as significant as Hammond’s brash announcements that most duties are not changing and claiming that this is a bold giveaway.
Personally, I’m pleased to see some nods towards helping the environment, particularly when the President of the United States will not even acknowledge that there is a problem.
However, discussions about what to do about plastic waste are hardly exciting. Support for electric cars and a hike in tax on diesel are good from this perspective, although I do feel sorry for people who bought diesel cars as a result of encouragement from previous administrations and are now being penalised for doing so.
For me, it could be argued that the most significant measure (and it is still far from exciting) is the enhancement of tax relief for investments in EIS schemes and Venture Capital Trusts that are seeking to enhance technological development. However, while tax incentives help it isn’t always easy to persuade people to invest in businesses that are quite likely to go down the pan without offering any return at all. It is all very well to say if you lose your money you will get tax relief but I’d rather not lose my money.
Even in the field of tax avoidance where the government has signally failed to up the stakes for either rich individuals or corporate giants, Hammond is doing no more than paying lip service to the fury of so many.
A technical change to the way in which VAT is levied on transactions offered through online marketplaces sounds good in principle. However, I have a nagging feeling that this will merely lead to higher fees for top advisers as they come up with clever schemes to get around the new legislation. If that sounds too cynical, I suggest that we review the position in five or 10 years’ time to see what difference the changes have made.
I would love readers to respond angrily to this article pointing out all of the substantive changes that are hidden in the not very voluminous small print attached to this non-Budget. Indeed, if anyone comes up with something really wonderful I might be tempted to offer them a whiskey, on the basis that I can still afford this since the duty is not going up.
About The Imprudent Accountant
Someone who should know better, but can't resist the occasional rant about the more exasperating aspects of the accountancy profession.