Spring Budget unveils ‘back to work’ tax measures
The Chancellor today used his “back to work” Spring Budget to lift the cap on tax-free pension contributions, freeze fuel duty and unveil the 100% ‘full expensing’ tax relief but he didn’t budge on the corporation tax hike.
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Funny how he thinks cutting duty on draught beer is a massive help to the general public. Gives you an idea of how they view us doesn't it.
Funny how he thinks cutting duty on draught beer is a massive help to the general public. Gives you an idea of how they view us doesn't it.
Did they cut it? I thought they just didn't put it up by inflation. Which is a cut when its a tax, but not if its NHS wages.
Hmm
Struggling to see the difference between 100% full expensing and 100% AIA. I'm sure there is one....
Criminal charges for tax avoidance promoters - does this include those partner adjustments, like a sudden decision to write down stock by 50%, or a sudden realisation that a client has done "R&D"?
The reason I always ignore these pontificate speeches is that they stand up and talk complete garbage. The MTD conflation of turnover with income is a classic case in point.
The analysis by serious minds on Aweb et al post hoc is always much appreciated.
My favourite however was when Gordon Brown announced a VAT-rate hike, mic dropped and bravely ran away.
I'm glad I'm not the only one. It seems to be unlimited, whereas AIA is limited but if it is, essentially, replacing AIA then why not just do that.
Full expensing in the accounts? But then all that does, other than dramatically change the balance sheet, is make the accounting profit look more like the taxable profit. Doesn't change the taxable profit.
Nope, I'm lost...! Only two weeks to find out the answer!!
Of course full expensing through the accounts, which is what I thought he meant when he announced it, would torpedo the profit and restrict how much can be paid out as dividends...
BUT
As we all suspect, director/shareholders are meant to take salaries, not dividends, right?
The difference is explained here:
https://www.gov.uk/government/publications/full-expensing/spring-budget-... paragraph 4.
Full expensing is available to companies subject to Corporation Tax only. It does not apply to unincorporated businesses such as sole traders, partnerships etc. Such businesses can claim the AIA for qualifying capital equipment costing up to £1 million per year.
Full expensing does not apply to special rate expenditure either. For such expenditure, a 50% first-year allowance can be claimed. Capital allowances are available on the balance of expenditure at the rate of 6% of WDAs.
I have been out all day but a client did tell me CT is going up to 25% (which for us it's not) and he asked what he could invest in.
I am struggling with this one too.
Of course the devil is always in the (currently missing) detail for all of it ... but
"Criminal charges for promoters of tax avoidance" is an interesting tidbit (well, except for the reference to a new consultation)!
In the doc: https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
"The government will consult shortly
on the introduction of a new criminal offence for promoters of tax avoidance who
fail to comply with a legal notice from HMRC to stop promoting a tax avoidance
scheme"
Thanks for the link ...that's a LOT of reading and without a sensible hyperlinked index (they obviously like to make you work for any information)!
Many of the items may be fairly minor and/or obscure, but it'll take some time (and several headache pills) to peruse it all properly.
Think ‘unveil’ is a bit strong. Made notes for our client email yesterday and because it was all confirmed it’s not worth sending it.
Disgrace abuse of Commons procedure and tradition.
Taking an hour to read yesterdays media is a ridiculous waste of everybody’s time.
There is a consultation paper on HMRCs website about extending the use of the cash basis, possibly making it the default (with opt out). I don't think this was mentioned in the speech. Cash basis is described as a valuable simplification, whereas with all government simplifications, it is the opposite. Ask clients if they want to move to the cash basis to simplify things and their response is 'which option means less tax?' So you have to do both options to compare.
For all unincorporated businesses, or all businesses?
It does make it easier to explain to clients on the lower end of the understanding spectrum but whether it actually helps them to pay less tax??
A move to make it, theoretically, easier to do their own MTD returns?
Best bit i found was it seems to now be official policy that no MTD for sub £30k turnovers.
P53 of the costing document.
So instead of maybe bowing to the doctors and doubling the lifetime pension allowance he abolishes it completely which obviously helps all those really poor friends of government.
I would have doubled the lifetime allowance but increased the tax even further if you go over the allowance.
Smart move- sucker them all into upping contributions/increasing pots and then some future chancellor (red or blue) can change things back/invent a new regime, meanwhile the assets are trapped in the pension pot.
Budget 2033- The Chancellor announces that all pension schemes will from 6th April 2033 require to invest (insert a number)% of their funds into (insert whatever pet project the government of the day has)schemes.
Making promotors of tax schemes criminally liable is fine, but they should start by making anyone involved in these jointly and severally liable for the tax that is lost. This should include the promotors, trustees, bankers, dodgy KC's, accountants that get a referral commission, the tea boy. That should focus a few minds.
I really cannot think of a polite way to describe this budget. Absolute load of c**p is the nearest I can get.
The budget is on a par with his asinine grin. I never thought I'd see the day when I longed for a Labour Government. The only trouble is that they would be twenty times worse as most of them are completely clueless ............wait a minute doesn't that describe this lot of numpties as well?
And I thought Gordon Brown and George Osborne were the nadir of Chancellorship - just shows how wrong you can be.
I really can't think of a positive comment to make. Who on earth can we vote for at the next election?
My sentiments entirely. Perhaps Nigel and Tony should start an EUNONEU party. It would certainly get my vote.
"He also introduced an “enhanced” R&D credit, which allows eligible small or medium-sized businesses to claim £27 back for every £100 spent on R&D"
Hardly seems worth the effort - only 2% more than a normal corporation tax deduction, post 31/3/23. And don't forget the R & D 'Consultants' will probably want 25% of the R % D tax credit, so the taxpayer will be worse off!
Clearly you don't deal with R&D: the £27 is a payable amount, so the company can be making a loss (not unusual in start ups, etc) and can recover that £27.
If the R&D rules didn't exist they would recover £0, as they haven't paid any tax...
I do deal with R & D. The £27 is the payable amount, using what would otherwise be a tax loss. So £100 of losses are used to get a £27 tax refund. If the company is not likely to make a profit then clearly a benefit.
But if the losses could be used against the following year's profits then the benefit seems to be 2%, plus cash flow, assuming the corporation tax rates remain at 25% - hardly very exciting as an incentive.
Well.....that was the usual waste of space wasnt it?
I am searching but cant find anything to help those businesses which are supposedly the backbone of the country = SME's
And if I was a doctor etc on strike I would be more than livid. I thought we had no money?
This bit of the document made me groan...
"Spring Budget also includes a discussion document on modernising HMRC’s
Income Tax services so taxpayers can quickly and easily manage their own
tax affairs online, reducing the need to contact HMRC."
>> wasnt that supposed to be MTD?
as said on the other thread now the 25% tax free lump is capped at the old limit, it will probably be eroded by fiscal drag by the time i retire
It's all very well targeting promoters of Tax Avoidance - those clever enough to see legal ways around our increasingly complicated tax system - with votes at the uppermost of any Budget. { And nothing less than than a stint in prison should be the correct result for rogue schemes }.
Meanwhile, the Black Economy prospers. I guess we must continue to pretend this mind blowing Evasion doesn't exist in our country.
Nothing on VAT, other than threshold frozen for 2 years from 2024, so that will probably drag a load more SME's 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.
Not seeing how this budget is good for growth or business, lots of focus on personal tax (lifetime allowances and personal tax threshold) and apart from the R&D stuff, not seeing how anything can encourage an SME to grow.
I have a client who is a retired surgeon who has been affected by the Lifetime Allowance and will not be happy that he has paid tax on it only for the allowance to be abolished now. Are the Government likely to backdate it?