Archive for the ‘Budget’ Category

h1

More competitive, simpler, greener and fairer.

March 20, 2014

After the election, the Tories and the LibDems got together and agreed on a programme of what they would actually do together in government.  On taxes, they agreed their priorities were to make taxes simpler, fairer, greener and more competitive.

So how did yesterday’s Budget move them towards those objectives?

More competitive

Can we just kick this one into touch now please?  According to the back of my envelope, the budget is giving away £920 million next year on measures tagged with “investment and growth” (table 2.1) when, by the World Bank and Bloomberg‘s methodology we’re in the top ten places to do business and well placed in KPMG’s tax competitiveness survey.  So let’s say, yes, we’ve DONE this one, and stop throwing money at it?  Please?

Simpler

Is the Budget going to make taxes any simpler?  Well, pensions and savings maybe – insofar as big chunks of them won’t BE taxed.  But in general?  OOTLAR (the inelegantly named “Overview of Tax, Legislation and Rates” document) has only seven instances of use of the words “simple” or “simpler”:

  • In a reference to the revalorisation of the VAT registration limit, commenting that this and the “simpler” income tax cash basis will help SMEs
  • In talking about the processes banks and building societies already have in place for savings, in claiming the abolition of the starting rate for savers won’t have much of an impact on banks’ processes.
  • In the general measure to let governments give tax exemptions for future sporting events without having to go through the rigmarole of passing specific legislation like they did for the Olympics and the Champions League Finals.
  • In a claim that “Chargeable gains roll-over relief: reinvestment in intangible fixed asset”  (sic: what, only one?) “makes the tax system fairer and simpler by clarifying the current legislation.” Uhuh.
  • Twice in “Modernising the taxation of corporate debt and derivative contracts” where it is claimed that the change to de-grouping rules “supports the Government’s objective of establishing a simpler, more certain and more robust tax system”.  Well, I feel much better for that.  You?
  • In the change to the ISA rules, so you don’t have to decide whether it’s better to have a few quid in a cash ISA or a few more in a stocks and shares one.

I mean, I’ll give you the last one, and I appreciate there’s some stuff coming out of the OTS so I think on the whole I’ll mark this one as “some progress; more to be done”.

Greener

Stop laughing at the back!

The “green” elements of the tax system are mostly around fuel duty, and it’s coming up to an election year, so you couldn’t expect the government to carry on with any of “that green crap”, now, could you?  Section 2.27 et seq in the actual Budget document, under the heading for spending on “Energy and Environment” is just embarrassing: 140 million extra on flood defences, granted, and £200 million on potholes but 2.31, 2.32 and 2.33 are laughable.  The government “welcomes announcements”, “has agreed” someone else will “set out plans for how they will help”, and “welcomes announcements by the vast majority of suppliers…”

No.  Green measures are definitely marked “see me” in red ink.

Fairer 

The thing is, if you’ve got a bit of money, then it actually does seem like a fair budget.  You can earn a bit more and save a bit more without faffing about with tax, you can do more with your pension than buying a bog-standard annuity, and you’re not going to have to pay more for petrol and beer.

But what if you haven’t got a bit of money to start with?  What if you haven’t just not got £15,000 a year to save in an ISA but you haven’t even got £15,000 a year AT ALL?  What if you haven’t got a job, or haven’t got enough hours, or you’re on a zero hours contract or you have a disability or are a carer?

Well you’ll be under the cap.  Because while there’s no limit on the amount of money you can accumulate in profits or rents or inherited wealth, and no-one is going to tax you on the money you make just from having stuff that accumulates in value, not even when you die and pass it on in their silver spoons to your children.

But if you haven’t…

… if you haven’t, well, there’s going to be a fixed amount of money.  Fixed like a granite slab over the heads of the ordinary, poor or unlucky; regardless of how many of us there are, or what changes in circumstances might have pushed us under.  And once you’re under, well, the cap fixes the amount we can share out.  Let’s fight it out amongst themselves.   I warn you not to be ordinary.

Sorry George, but beer and bingo aren’t going to distract us from noticing.  Fairness – must try harder.

h1

New Direction?

March 13, 2014

So if you believe what you read in the papers, boy band One Direction are asking their fans to lobby the Chancellor in favour of maintaining the foreign aid budget at its current level and to crack down on corporate tax avoidance.

Well… actually they are offering two tickets to each of their concerts via a lottery, and to enter the lottery you have to take part in various actions on a campaigning website each of which  gets you “points”.  If you amass twenty points you can enter the lottery, and you could amass twenty without lobbying George at all.  But still.  If you’re over 30, either say nothing at all or just say “bless” and applaud the sentiment.

You might think that One Direction are treading on dangerous ground because, as the newspapers are quick to point out, their own corporate structure is, um, efficient because, tax competitiveness.

However let’s assume all is for the best in the best of all possible worlds, and that there will be millions of teenage girls lobbying the Chancellor for tax changes in the Budget…

Whatever might they ask?

Well, if they are really interested in corporate tax avoidance, they might lobby for an end to tax competitiveness as an objective of tax policy.  They aren’t the same thing, of course, but it’s hard to fix avoidance – it takes money and resources, and we apparently don’t have any.  But tax competitiveness is a government policy.  It’s the idea we should lower our taxes so that firms will base themselves here.  It was one of the four objectives for tax policy agreed in the Coalition agreement (para 29) and, according to KPMG’s latest survey of tax competitiveness it’s been achieved.  We’re up there in the global competitiveness stakes.

“Even better, the results suggest there is no need for a ‘race to the bottom’ on rates with few respondents calling for further rate cuts.”

See George?  You could mark that one as “job done” and just stop.  Let the One Direction fans turn tax policy in, no, sorry, I have to say it, a New Direction.

h1

It couldn’t be…

February 18, 2014

If you remember this time last year, you may recall that I put in a budget suggestion that HMRC should stop traumatising pensioners who have given a bit more to charity than the tax they paid.  If they declare gift aid greater than the tax deducted from their pensions, HMRC seems to think “Aha!  Tax gap target reduction!” and treat them like evaders.  I’m sure that’s not the intention of anyone who has given the situation a moment’s thought.  Nevertheless it seems (to me at any rate) to be the effect of cutting staff and increasing targets, so that people make up their statistics in any way they can in order not to fall foul of the idiotic performance management system.  So ill-advised and over-generous pensioners are an easy “quick win” for someone.

My budget suggestion?  Just stop it!

I said a bit more than that, of course (you can read the full thing here)

So I sent it in last year and… nothing happened.

Being incorrigibly curious, I then put in a Freedom of Information Act request to find out what had happened to it – envisaging a correspondence between one team and another that went something like

  • “Shall we do this?”
  • “Who did it come from?”
  • “That Bradley woman.”
  • “Oh well then; no.”

But actually what I got was something a bit more interesting…

Nothing.

They had no record of having received my budget submission, even though it had gone through the dedicated “portal” that they set up last year.  I asked them to go back and review the FoI request and they came back and said, in effect, no, honest guv, we can’t find anything anywhere.

How odd, I thought.

So this year, I put the same suggestion in again.  This year the arrangements are slightly different: you send the suggestion in to a dedicated email address (rather than through a web portal) and you were assured you’d get an automated response.

My email went in at 15.55pm on 14th February.  The closing date was 14th February, so by any stretch of the imagination I was within the deadline.  And I confidently awaited my automated response.

And waited…

And waited…

Yesterday, I sent a follow up email to the Treasury’s general correspondence address asking them to check, because I really would like someone to look AT the suggestion this year, rather than just FOR it!

This morning?  I get an email from the Treasury budget.representations@hmtreasiury.gsi.gov.uk address which reads:

Dear Ms. Bradley,

I can confirm the safe receipt of your budget representation.

Thanks,
George

Now, that’s NOT an automated response (because, several days late and personally addressed?)

And… George?  George???  It couldn’t be, could it…?