Was this the Autumn Statement of discontent or are we all in it together? The Chancellor had a difficult job having missed both debt and borrowing targets but feels the economy is healing.

Against a backdrop of a shrinking economy the Chancellor gave a clear message of support for businesses in his Autumn Statement with a whopping increase in the annual investment capital allowance from £25,000 to £250,000 for 2 years and a welcome further reduction in Corporation tax to 21% by 2014.

The temporary doubling of the small business rates relief until 2014 is welcome news for those businesses that occupy one property with rates of £12,000 or less. Small businesses can also expect a simpler income tax from April 2013 with draft legislation expected in December.

As predicted, pension allowances were a key agenda point this Autumn Statement. High earners are faced with cuts to pension lifetime allowance from £1.5m to £1.25m and the annual allowance eligible for tax relief is falling from £50,000 to £40,000 from 2014/15. This will have an impact and it also sends out a worrying message these may be reduced even further in the future. 

Tax avoidance still remains the hot topic. The Chancellor continues to clamp down on tax dodgers with a package of new measures to combat tax avoidance and evasion providing additional resources for HMRC. 

The Chancellor also looked at measures to help lower income earners by increasing the amount they can earn before tax to £9,440 next year. This was countered with a reduction in the higher rate income threshold to £32,010 from 2013/14.  

In a bleak Autumn Statement, the Chancellor sweetened the pill by scrapping the 3p in the litre petrol rise but had to admit the squeeze is still on until 2018 as he admits he missed the target for debt – proving George Osborne is only human after all.

If you wish to discuss this blog please contact 01344 620495 or mark.busby@dbsellek.co.uk

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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

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.

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.

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

We’re in the mire and we’re getting deeper and deeper and the only reason politicians  don’t turn around and say “Oh dear” or something similar, is because this is a balancing act. The man on the street knows this and we all know we’re heading into another recession.

At the beginning of year there were all these growth projections which personally I didn’t believe. Economists always quote 2% as the average growth rate and to be told we will be achieving this level of growth at a time when Greece was defaulting and there was a secondary banking crisis was just not plausible.

No-one really doubts we are in or are heading into a debt/sovereign crisis and that we need growth. Ed Balls and George Osborne’s cosy-up on Andrew Marr’s sofa at the weekend was fooling no-one. Growth is the white elephant in the room and until we have growth it won’t get any better. To my mind, growth is not going to come from the bigger companies. I really do believe that until we get small businesses going through an organic process and growing you won’t see any green shoots.

Large companies are like flowers in the garden, they bloom but then you can’t maintain them forever. Some companies have become too big for their pots and therefore unmanageable. Think about the recent announcement in the news where the Government has been paying large IT companies £2,500 for a PC. It just shows to my mind that some of the larger companies have become full of the law of unintended circumstance leading to irrational results. Then we were at a time when we could afford irrational cheques but those days are long gone.

So  I welcome anything the Coalition is doing for the small business. The Chancellor’s Autumn Statement is a start but it’s essentially tinkering at the edges.  The credit easing scheme for the small business needs some careful thought too. The proposed National Loan Guarantee Scheme could just encourage banks to switch small businesses to these Government backed loans at the risk of the tax payer.

The last time there was any real Government support for the small business was when Mrs Thatcher was in power and we’ve not seen anything since. I think we have to say that the big business hasn’t produced enough results to stave off the problems we have at the moment. The real entrepreneurs, doing what Richard Branson did all those years ago, are what we need. And the Coalition have been slow to address opening up tendering lists to small companies.

What’s more, we should be inspiring the younger generation because they are tomorrow’s entrepreneurs. We need to change the old guard with businesses that have energy and new ideas.

It’s all about growth and to my mind large organizations need refreshing. The garden needs a good prune to make room for some growth from little green shoots!

If you would like to know what the Chancellor George Osborne is saying about UK economic growth forecasts, then tune in to my tweets on 29 Nov. The Autumn Statement replaces the Pre-Budget report introduced by Gordon Brown to outline the government’s tax plans. The statement follows the latest economic forecast from the Office of Budget Responsibility. George Osborne will report on the state of the economy and respond to the latest figures from the OBR.

Follow my tweets on Chancellor’s Autumn Statement live 29 Nov

With the Spring Budget long gone, it’s easy to forget about the changes and how they may affect you in practice.

If you have any worries or concerns then happy to discuss on 01344 620495 or mark.busby@dbsellek.co.uk Time pressured then we’ll come to you – home, workplace or wherever suits.

So we hope you find the following helpful:

• Availability of 100% tax deduction on capital expenditure will reduce to £25,000 (from £100,000) as of April 2012
• Main rate of Corporation Tax lowered to 26% from April 2011
• Small Profits rate (previously known as Small Companies) is now 20%
• VAT registration threshold is £73,000 as of 1 April 2011
• Capital Gains Tax Entrepreneurs’ relief doubled to £10m
• Mileage rates increased to 45p (from 40p) for first 10,000 miles
• Capital Gains Tax exemption raised to £10,600
• ISA annual investment limit raised to £10,680 for April 2011/12 tax year
• Personal allowance increased to £7,475. Basic Rate Band decreased to £35,000
• Annual pension contributions reduced from £255,000 to £50,000 from 6 April 2011

Spring has sprung at last and where was I this lunchtime? I was inside listening to none other than Mr Osborne’s dulcet tones telling us how we’re all in this together for this, his second Budget. I have to say Mr Osborne certainly gave a polished performance today. I get the feeling he’s probably been having some secret voice coaching since the last Budget. Maybe he’s been taking lessons from the King’s Speech and Colin Firth.

So here’s the thing, rather than simply repeating the Chancellor’s Spring Budget announcements which can be quite dry, I thought I’d give you my Jeremy Clarkson slant and tell it how it is. It looks like the Chancellor is broadly encouraging investment into the UK ish. Whether you agree or disagree with Osborne’s announcements today, his focus was definitely macroeconomic and not micro with his attention firmly on attracting inward investment and heading off  a steady exodus of high earners and companies to more pleasant tax-efficient climes. Yet I can’t quite get my head around the fact he wants to charge Non-Domiciles £50,000 but then let them off remittance taxation if they invest back into the UK economy.

Chill the bubbly if you’re a business owner thinking of selling your business any time soon then get on the phone to your accountant or investment adviser. You’ll now be far better off with the Chancellor’s pledge to double Entrepreneur’s relief from £5 to £10 million. And if you’re the type of investor who likes to take a punt and invest in the more risky entrepreneurial type companies then you can now invest more heavily and get more tax relief when investing in Enterprise Investment Scheme qualifying companies

As Osborne struggles to compete and support the private business, he knew he needed to do something about taxation. So his decision to reduce Corporation Tax by 2% in 2011 falling to 23% by 2014 is good news indeed. He left the Smaller Companies rate of Corporation Tax well-alone and this will fall to 20% from 2012. He also plans to remove the burden of red tape, delay Small Business rate increases and make credit more readily available for the business start-up and SME. Not quite sure where Boris Johnson will set up his enterprise zone though – maybe a Gin Distillation factory in Knightsbridge?

For those of you in a charitable mood you can now also get a discount on your Inheritance Taxation which can’t be bad. And of course the ubiquitous pothole pot means you can now lobby your local council to improve a road near you. While the 45 pence mileage rate rise for the first 10,000 miles was a nice surprise but a long time coming and why the 25p rate on mileage thereafter?  An added bonus and welcome respite came when the Chancellor finally saw sense and cut fuel duty by 1p per litre from 6pm 23 March.

To sum up, hold onto your hats folks we’re in for a rocky ride!

The Spring Budget 2011 is going to be particularly difficult for voters and Lib Dem back bench benchers. What with a shrinking economy, rising inflation and oil prices, a declining house market and rising interest rates anytime soon, the Coalition finds itself between a rock and a hard place. Cameron is now turning his attention to the small business and entrepreneur to help lift the country out of recession.

I would hazard a guess that most announcements were made in the last Budget but I wouldn’t put it past the Chancellor to use the first Budget for some favourable business tax reforms which demonstrate his plans to boost the economy.

So this is what I expect from the Chancellor’s Budget on 23 March:

Predictions for individuals

Personal Allowance will go up

I am confident that the personal tax allowance rise from £6,475 to £7,475 predicted in the last Budget will happen in April 2011 and that there will be a further rise of £1000 in 2012/13. Basic rate payers will be happy but many tax payers will now find themselves falling into the higher rate tax band when the basic rate limit drops from £37,400 to £35,000. In effect the middle will be further squeezed as the basic rate drop negates any increase in personal allowance. There will be yet more misery in April 2012 for those find themselves paying the higher rate when Child benefit is removed. I’m not sure how the Coalition plans to address those earners not paying income tax under £10,000 pledge but whatever they do, they’ll tread carefully to avoid another university fee backlash.

Non-domiciles face a tough time

There is still this disjuncture between personal tax for overseas individuals and taxation for overseas corporates. The Coalition has a dilemma since they have to be seen taxing non-doms but also encouraging UK investment. My guess is they will introduce high level rules for individuals to show they are doing something but then will soften the corporate rules so businesses can pay out to overseas parent companies.

Fuel Duty postponed - Both Osborne and Cameron have hinted they will postpone the 1% increase on Fuel duty.  This will obviously leave a funding gap.

Inheritance tax frozen – It is likely the Chancellor will go ahead with the freeze of the nil-rate band @ £325,000 for individuals and £650,000 for couples.

Showroom car tax rears its ugly head – I suspect this one will still go ahead although it’s not widely remembered. Alistair Darling’s 2008 announcement for a one-off car tax for new cars registered and purchased after 1 April 2011.

Predictions for Businesses

Corporation tax to go down

I am confident the Chancellor will keep his promise to reduce the rate of corporation tax to 27% in April and then 26% the following April. I also fully expect him to confirm the lowering of the Small Companies tax rate down from 20% from 1 April 2011.

Capital allowance stays the same

Cameron is signalling that he will do everything he can for SMEs and enterprises. So I don’t see tax rates going up for businesses but I’m not sure that they will adjust capital allowances either. They could think about introducing enterprise zones but could potentially run into problems with the EC.

VAT no change

I think it’s very unlikely the Chancellor will raid the VAT treasure chest so soon.

Enterprise – the billion dollar question!

I really hope the Coalition make good on their pledge to make it easier for small businesses to trade and create more of an enterprise culture. There is currently nothing in the legislation that recognises small businesses are different to big industry corporates. SMEs need better rules to allow them to operate more easily. They need to remove restrictive tax and employment rules and essentially deregulate businesses.

Budget Prediction Summary

What with predicted inflation and interest rate rises, 2011/12 is going to be a more expensive year and consequently small businesses and individuals will need to react. So pick up the phone now and call 01344 620495 to see how we can help you and/or your business plans.

Follow my live Budget tweets http://twitter.com/dbsellek 12.30pm Wed 23 March 2011