The Budget in black and white - it’s mainly shades of grey, says Danny Clifford
- Credit: Archant
It was John Major (or his Spitting Image puppet) who “ran away from the circus to become a chartered accountant” but today it was Philip Hammond with the circus skills – juggling while on a tight-rope on a knife edge.
With growth forecasts for the next five years revised substantially downwards the Chancellor’s hands were tied in terms of tax reductions or giveaways.
Conversely there is a general feeling that the “pips have been squeezed far enough” in terms of public sector pay (particularly in the NHS) and an unease with the impossibility facing many of the younger generation in getting on the housing ladder. So what could he produce?
The policies announced at this Budget are largely aspirational. Funds are being put aside for more houses, better infrastructure and NHS pay. A majority of first-time house buyers will benefit from a zero rate of Stamp Duty Land Tax on the first £300,000.
There is some attempt to increase the tax take by further clampdowns on tax avoidance. There will be changes to tax on royalties received in respect of UK sales where the royalty is held in a “low tax jurisdiction”. The Chancellor estimates this is worth £200m a year.
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However that is a drop in the ocean in relation to the bigger picture – the extra billions set aside for projects, the NHS and Brexit.
Clearly there has been a “loosening of the belt” by the Chancellor, but just enough to let us catch a breath of air. The hope is that the pro-growth strategies announced will stimulate the economy and thereby increase tax revenues in future. After all, someone has to build the houses, materials must be purchased and wages paid. All of these create tax revenues.
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But there were no eye catching tax giveaways and no headline grabbing tax increases.
It is the Budget that those of us who have to make Budget presentations over the next few days fear most – little to really get your teeth into. (Fear not those attending the Ensors’ Budget breakfasts – we can still entertain).
However, I have long held the view that sometimes doing nothing is a valid plan. The myriad changes each budget to tax rates, reliefs, allowances, legislation and priorities (is it petrol or diesel we hate this year?), while giving us pundits plenty to discuss, merely creates obstacles for those trying to run a business. The cost of wasted time over recent years on initiatives that will have little benefit for anyone has been huge.
If the Chancellor had asked me, as a businessman, what would be the priority at this Budget I would have said to make as little change as possible. So this may be (in that sense at least) close to the Budget I wanted. It might be “John Major dull” – but take what you can get. Better the devil you know.
•Danny Clifford is tax and trust partner at Ensors Chartered Accountants.