March 22, 2012

My take on Budget 2012 by Mark Busby


As I said before George Osborne’s Budget 2012, second guessing the Budget wasn’t an option. Well, I didn’t win at Cheltenham races and neither were there any middle class winners in this Budget race. The Chancellor’s cries of “this budget rewards work”,”making the tax system easier” and “I have poor distaste for tax avoidance” has me reaching for the aspirin!

The brunt of the Budget appears to fall on the middle working class while top earners can look forward to a reduction in the 50p rate of tax and those at the other end of the lower income spectrum may well be taken out of tax altogether as a result of an increased personal allowance.

I can’t help but feel a degree of scepticism as regards the comments about tackling tax avoidance. It seems to suggest that this was simply tolerated in the past but will no longer. As to where the armies of highly trained tax inspectors will come from to fight the good fight I have no idea.

High earners celebrate a small win with the reduction of tax from 50p to 45p but given that it does not come in until 6 April 2013 there will be no need to bring forward any bonuses.

It’s good news for businesses too with the main rate of Corporation tax cut to 24% and with promises of further reductions in the coming years. While the increase in the personal allowance to £9205 will be welcome news the announcement that the government intends to abolish age related allowances for pensioners seems to my mind to be disgraceful.

Individuals who own UK properties via overseas trusts and companies will also need to review their affairs given the announcements that theses structures will no longer be effective for avoiding capital gains tax and stamp duty.

My biggest disappointment is the absence of detailed draft non-residency legislation! Another year of being left in the dark!

Read more – handy Budget 2012 guide

Important - we endeavour to keep the information on this Site and the Blog accurate and up-to-date as far as possible. However, please remember the content is intended as a helpful guide only and may be subject to change at any time. Please always seek advice from your accountant or Davis Burton Sellek before acting on any of the information provided.



Budget 2012 Snapshot

 

The Chancellor unveiled a range of measures in the Budget 2012 that left no doubt that the ‘age of austerity’ is not yet over. Though thanks to a steady stream of pre-Budget announcements and leaks, Mr Osborne had little to offer in the way of surprises other than the gaping omission of non-residency legislation!

The Budget highlights included:

  • The personal allowance will be increased to £9,205 in 2013/14, but the higher rate threshold will be reduced by £1,025 to £41,450.
  • There will be a limit on the maximum amount of income tax reliefs that can be claimed from 2013/14.
  • As expected, from 2013/14 there will be a drop in the higher rate of income tax from 50% to 45%.
  • The so-called ‘mansion tax’ has taken the form of higher stamp duty on house sales over £2 million.
  • Child benefit is to be phased out where income is over £50,000.

If you would like to discuss how the Budget affects you please call me on 01344 620495.

Important - we endeavour to keep the information on this Site and the Blog accurate and up-to-date as far as possible. However, please remember the content is intended as a helpful guide only and may be subject to change at any time. Please always seek advice from your accountant or Davis Burton Sellek before acting on any of the information provided.



March 21, 2012

Breaking news on Budget 2012


If you missed Radio 4′s Budget 2012 update 21 March, the media were talking about the Chancellor’s Budget plans to raid the super rich to pay for the proposed personal increase allowance to over £9,000 – pleasing the Lib Dems no end. Chancellor George Osborne is due to reduce 50p tax for those high earners earning over £150,000. The plan is to offset all of this with taxes on the super rich targeting stamp duty on London properties over £2million and closing down tax avoidance loops. As yet, it is difficult to judge if it is a Robin Hood budget and we await the independent view from the Office for Budget Responsibility at the Budget 2012 12.30pm today.

For up to the minute news follow my live Budget tweets http://twitter.com/dbsellek 12.30pm today.

Important - we endeavour to keep the information on this Site and the Blog accurate and up-to-date as far as possible. However, please remember the content is intended as a helpful guide only and may be subject to change at any time. Please always seek advice from your accountant or Davis Burton Sellek before acting on any of the information provided.



March 13, 2012

My Budget 2012 thoughts by Mark Busby

I’d have more chance of winning at Cheltenham Races than predicting what’s going to be in the 2012 Budget. In my opinion it is all up for grabs on 21 March. Will the government introduce a mansion tax, cuts to pension tax relief or increase the tax threshold is anybody’s guess at this point. For what it is worth here are my thoughts on the 2012 Budget:

50p tax versus mansion tax

Tax as ever along with closing tax avoidance loops are the hot topics this Budget. Everyone agrees the higher earner 50p contribution isn’t fair, not least John Redwood who claims a 40p tax would collect more money than 50p anyway. This idea of swapping the 50p tax for a mansion tax is fatally flawed in my mind and would certainly have a disproportionate effect on the South East. Watch this space..

Pressure on working tax credits this Budget

The Chancellor is under increasing pressure to reverse the working tax credit and child benefit cuts due this April. The increasing pressure from media and politicians for some kind of transitional relief may provide some give here.

Businesses and the Budget

Optimisim among businesses rose to its highest levels in February according to BDO Business Trends with increased confidence in manufacturing and services. Businesses can look forward to a welcome drop in the main rate of Corporation Tax to 24% from April with the Sunday Times reporting that Chancellor Osborne will announce plans for Corporation Tax cuts to 20%. The Workplace pensions law changes are still on the cards but paired down so only impacting larger businesses from October. On the whole the Government does seem to be doing its best to prevent corporate migration, thankfully.

Residency rule changes on track this Budget

I would be very surprised if the previously announced residency rules to increase annual charges from £30,000 to £50,000 don’t come in. This would cause some major head scratching if this didn’t happen.

Pensions rush before the Budget

Higher earners are clamouring to claim pensions tax relief amid speculation the Chancellor may do away with higher rate tax relief.The possible abolition of the high rate of tax relief just further illustrates this type of investment is difficult to plan for in light of the constant tinkering with pensions of late.

Follow my live Budget tweets http://twitter.com/dbsellek 12.30pm Wed 21 March 2011

Important - we endeavour to keep the information on this Site and the Blog accurate and up-to-date as far as possible. However, please remember the content is intended as a helpful guide only and may be subject to change at any time. Please always seek advice from your accountant or Davis Burton Sellek before acting on any of the information provided.



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