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Jeremy Hunt Budget
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Accountants react to ‘back to work’ Spring Budget

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As Jeremy Hunt’s long-awaited Spring Budget arrived, the accounting community had its say on the Chancellor’s rejection of the “narrative of decline”.

16th Mar 2023
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Jeremy Hunt’s “back to work” Budget saw a raft of policy offerings for the accounting community to get their teeth into. And while the announcement was light on tax-cutting measures compared to its predecessor, the Chancellor put forward a plan that he argued will deliver “not just growth from emerging out of a downturn, but long-term, sustainable, healthy growth”.

And, while multiple leaks before the big announcement gave many commentators ample red meat to work with, the community was still happy to offer their twopence after Hunt’s first Budget at the dispatch box.

Steadying the ship

In the lead-up to the Budget, members of the Any Answers community were hoping for less of a flashy affair and more of a steadying of the ship.

User rmillaree hoped the government would steer clear of any groundbreaking changes that could affect the new tax year on the horizon, and lamented the switch in importance of the Autumn and Spring Budgets. “I understand we have had a change of PM but the same party should not be doing any micro-managing two weeks before the start of the year, or worse still, in the year,” wrote rmillaree.

Others agreed with rmillaree’s assessment, with user Matrix imploring the Chancellor not “to make any more changes to income tax, corporation tax or NI since we have had all our year end tax planning meetings.”

The community reacts

After the news of the Budget broke on AccountingWEB, the community was mixed on the Chancellor’s announcements, with some aspects of the Budget leaving a sour taste in the mouths of members. 

“Just doff your cap to the squire and drink up. We know our place,” wrote user Eric T, presumably in response to Hunt’s “warm beer” comments following the announcement that alcohol duty was to rise with inflation. Member tedbuck gave a more frank evaluation of his feelings about the Budget by saying: “I really cannot think of a polite way to describe this Budget. Absolute load of c**p is the nearest I can get.”

On the other hand, it was the noticeable absence of certain policies that irked some users, with veteran contributors Jason Croke and Jennifer Adams worrying for SME clients due to the lack of support. “I am searching but can’t find anything to help those businesses that are supposedly the backbone of the country – SMEs,” Adams wrote, also asking in light of the recent strikes: “If I was a doctor on strike I would be more than livid. I thought we had no money?”

Expanding on Adams’ comment, Croke noted that there was “nothing on VAT, other than a threshold frozen for two years from 2024, so that will probably drag a load more SMEs into the VAT net.

“With increasing costs, businesses will have to put up their prices and that means reaching that threshold a bit quicker than had it moved with inflation,” Croke added – a point which he explored further in a recent article on AccountingWEB.

The LTA debate

The abolition of lifetime allowance (LTA) led to spirited debate among the community, as members discussed the benefits and drawbacks of one of the Chancellor’s big hitters of his first Budget.

AccountingWEB regular Justin Bryant saw the end of the LTA as one of the few positives in the Budget, arguing that its introduction was “a totally stupid disincentive to work long and hard and save hard.”

Arguing that the announcement was just rewarding the rich, rmillaree said: “I wouldn’t be so against it if we could afford it, but the reality is we are stealing off other people’s grandkids to fund stuff like this – no coincidence MPs will be much better off.”

DJKL also threw their hat into the ring, believing that the Chancellor’s decision was a “vote loser”, with constituents likely seeing the move “as perks for the Tory Boys and will detest the Conservatives even more.”

Tougher on tax avoidance promoters

Another area that piqued the interest of the AccountingWEB community was the announcement of criminal charges for promoters of tax avoidance schemes, with the Chancellor promising a consultation.

“Prison sentences for marketing tax avoidance schemes is an interesting concept. Looking forward to seeing the details of that one,” wrote AWEB regular LionofLudesch, with DJKL adding a slightly more macabre reply, writing: “I would prefer a more Mikado approach to suitable punishment – boiling oil.”

Member Ruddles, however, remained sceptical, wondering what HMRC would deem a tax avoidance scheme in the future, and how that could potentially trickle down to the accounting community. “We’re not talking about prison sentences for marketing tax avoidance schemes. We’re looking at sentences for continuing to do so when told to stop,” DJKL wrote.

“The worry is what HMRC consider to be avoidance – presumably the schemes will have to have specified hallmarks, otherwise all tax advisers can expect a letter in the post telling us to ‘Stop providing tax advice to your clients’,” Ruddles wrote.

MTD swang song?

And of course, it wouldn’t be a Spring Budget without giving the AccountingWEB community an extra chance to give MTD a kicking, with news of the official scrapping of MTD for companies with a turnover of £30k or less.

“That is probably 75% of the problem cases removed. Most landlords are out and all micro-businesses,” wrote user ireallyshouldknowthisbut.

“Partnerships too, wow. I don’t really see who will be left in MTD unless incorporation becomes less attractive due to increased CT/disclosing P&L etc,” user Matrix replied.

However, Hugo Fair was quick to remind the community that, while this may cut out a large swathe of taxpayers from the future scheme, nothing is set in stone when it comes to HMRC. “Today’s announcement doesn't change the previous ‘promise’ to review the options for those groups. Indeed, plus ça change (so far).”

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