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Conservatives win landslide majority: Accountants react

The 2019 election delivered a resounding victory for the Conservative Party, and the accountancy community reacted with demands for an immediate Budget, stability for business and tax reform.

13th Dec 2019
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The Conservative Party has won a handsome majority of 76 seats in the first December election since 1923.

The scale of the victory surprised both voters and commentators, with Boris Johnson’s message of a quick exit from the European Union and freezing the main tax rates chiming with the electorate and securing his party its biggest majority since the 1980s.

While much of the relatively short Conservative manifesto concentrated on the benefits of leaving Europe, accountants will note that the party has promised to freeze the rates of NIC, VAT and income tax, as well as reform the insolvency rules and the audit regime.

In the run-up to the election, Chancellor Sajid Javid also promised a full review of the new off-payroll (IR35) rules for the private sector. However, any evaluation would need to be conducted quickly given the rules are due to come into force in April.

Commentators have also cast doubt on how much the result will actually change tax policy, with one expert commenting to AccountingWEB that the scale of Conservatives' majority will give HMRC carte blanche to continue rolling out a programme of tougher enforcement, including the new IR35 rules, the Loan Charge and further avoidance measures.

When the first indications of the result broke at 10pm via an exit poll, the pound surged to an 18-month high, jumping by more than two cents against the US dollar and a similar percentage against the Euro. Traders put the rise down to market relief at a functioning majority government and room for the Prime Minister to ignore hard Brexit elements of his own party when it comes to EU negotiations.

AccountingWEB members took to the Any Answers forum to express their views on the result. Reader ‘thegreatgrumbleduke’ called for the Tories to “get a Budget date sorted, fix the broken mess that is the tax system, and get on with providing the business community with some actual stability”.

And long-term member JDBENJAMIN expressed relief and delight at the vote. “It means I will not in the coming years have to refer loads of clients to specialists in insolvency or in the tax effects of emigration,” they commented. The comment reflected the views of many readers who took to the comments section of AccountingWEB's Labour Party manifesto write-up to express concern about its content.

Professional body AAT was quick to call for reform, with its head of public policy Phil Hall asking a new government to give “serious consideration to reforming Stamp Duty” and to “thoroughly examine how to improve the effectiveness, fairness and simplicity of inheritance tax”.

Meanwhile, accountant and professor of political economy Richard Murphy pondered what the future may hold for a Conservative majority government. “First [Boris] Johnson might let Scotland go as it does nothing for him,” said Murphy. “And he will do a very soft Brexit to keep people happy. And lots of Labour policy may now be adopted to overcome the probable intense disappointment many new Tory voters will feel.”

To check how accountancy's parliamentary prospects got on, head to AccountingWEB's candidate write-up.

Replies (18)

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7om
By Tom 7000
13th Dec 2019 10:21

I don't have to start commuting from Portugal now and ensuring I comply with RDR 3... phew....

Although I can say the cost was only £50.99 for a return. Not much different for the 30 mile trip on a train to London....

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Replying to Tom 7000:
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By North East Accountant
13th Dec 2019 10:36

Portugal's loss is the UK's gain Tom.

I was looking at New Zealand!

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Replying to North East Accountant:
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By Rgab1947
13th Dec 2019 12:29

North East Accountant wrote:

Portugal's loss is the UK's gain Tom.

I was looking at New Zealand!

For me it was France.

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Replying to Tom 7000:
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By Casterbridge Hardy LLP
13th Dec 2019 10:58

Me neither thank goodness.

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Replying to Casterbridge Hardy LLP:
By Red Leader
13th Dec 2019 13:19

Less flying is a good thing.

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By Casterbridge Hardy LLP
13th Dec 2019 10:26

As far as accountants are concerned governments are a pain in the nether regions because they are so remote from the realities which face those accountants and their S M E clients that they drift along in a bubble created by H M Revenue and Customs (does IR35 ring a bell?). I remain to be convinced that the current bunch in the House of Commons will break the mould.

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By dmmarler
13th Dec 2019 10:49

This is just the opportunity for the Chancellor to seriously reform our tax system to make it ultra simple and straightforward - no sticking plasters. No National Insurance so no need for IR35 stuff, no civil servants dedicated to NI and its compliance (together with their considerable on-costs, such as pensions, training, IT and establishment costs). So no NI on benefits in kind. One simple tax allowance for everyone, and anything unused transferrable to legal partner at the end of the tax year, if requested. Anyone who pays tax in any one year to get credit for that year for State pension purposes so bringing in all those with multiple part time jobs who are outside the system at the moment. Corporation tax payable on published profits, and therefore no distortions re capital allowances/depreciation/entertainment. IHT to be simplified and CGT abolished. VAT to be reformed to meet our requirements. All the old legislation to be repealed and replaced so there are not tomes of tax guidance. Then we can concentrate on helping clients understand the finances of their businesses and make more money.

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Replying to dmmarler:
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By Casterbridge Hardy LLP
13th Dec 2019 10:59

Your optimism is a credit to you.

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Replying to dmmarler:
By SteLacca
13th Dec 2019 11:48

Wow, I'm getting deja vu. Every time there is a change of government and/or chancellor, someone says this (or similar), and every time we learn that the more things change, the more they stay the same.

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Replying to SteLacca:
Hallerud at Easter
By DJKL
14th Dec 2019 11:50

"There's nothing in the streets
Looks any different to me
And the slogans are replaced, by-the-bye
And the parting on the left
Is now parting on the right
And the beards have all grown longer overnight"

"Meet the new boss
Same as the old boss"

https://www.youtube.com/watch?v=zYMD_W_r3Fg&list=RDzYMD_W_r3Fg&index=1

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Replying to dmmarler:
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By carnmores
13th Dec 2019 13:44

NI is one of the few avenues left for a chancellor for progressive taxation ;-)

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By johnhemming
13th Dec 2019 16:53

The eternal problem with simplification is that the people who suffer from simplification get upset because they will have to pay more/get less. Hence the option is to have a simple system of ensuring everyone pay benefits or at least does not lose out. That gets expensive.

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By memyself-eye
13th Dec 2019 17:39

Phew.. my shares in Centrica, BT, Royal Mail, TalkTalk and Vodafone are safe from the Trotski-eytes of the 'hard left'

Worthless, but safe.

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By Glenn Martin
16th Dec 2019 09:41

For me it was the perfect result, creating a government that has the power to make change and break the status quo.

IT will hopefully force the opposition to clean house and remove the Momentum thugs from the part to build a credible opposition which a democracy needs so a win win.

Boris is clear the North have only lent him votes so he needs to not mess up.

After a few years where things have been quite stagnant I have a positive feeling that 2020 will be a good year, with infrastructure work kicking off and hopefully some money into the economy.

I have not felt like this since 1997 when Tony Blair swept to power on the back of "Things can only get better". They did and what followed was a pretty good 10 years, right up to the point it all went [***] up and history recorded him as a war criminal.

2019 was [***] year for me so lets hope 2020 "Things do actually get better".

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Locutus of Borg
By Locutus
16th Dec 2019 10:25

I'm glad that Boris won.

From my perspective, Corbyn was fundamentally unsound to be PM, due to the people / organisations that he chose to associate with and the worldview he has held over the decades. His manifesto (even without the extra spending pledges during the campaign) just seemed like a recipe for chaos to me.

Boris has said and written plenty of silly things over the years and is prone to exaggeration - but this can be said of many politicians.

For better or for worse, Brexit will now be delivered and the rest of the Conservative policy agenda can be delivered.

If Labour are to ever get back into power then they have to ask themselves who might best win back their northern heartlands - probably not a London MP, anyone who wants to re-join the EU soon or anyone from the "Loonie Left" end of the party. The Labour Party also needs to be cleansed of Momentum, in the same way that Militant was purged by Kinnock in the 1980s.

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Replying to Locutus:
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By justsotax
16th Dec 2019 13:34

For better or worse.....I was promised better....by Boris no less....(prone to exaggeration...I can believe that)…..already I fear the start of realigning expectations of Brexit by the very people who wanted it......

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Replying to justsotax:
Locutus of Borg
By Locutus
17th Dec 2019 22:17

I think it will be for the better in the medium to long term. The EU is gradually federalising and I want no part of that.

I dare say there will be costs and challenges to overcome in the short term, as there are with all major policy changes.

It is likely that over time, the direction EU takes will feel alien to the majority of us in the UK and rejoining will be as unpopular as joining the EU is in Norway, Iceland and Switzerland.

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By justsotax
16th Dec 2019 10:26

….thank god we have changed government....to erm...the ones who have been in charge for the last 9 years.....

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