Friday, 8 May 2015

Will there be a June Budget?

So what does George Osborne do next, now we know he remains Chancellor?

There's been talk of a mini-Budget in June to lay out his plans for the next five years. But does he even need one? Perhaps not.

"There's no need. He doesn't have to bother," says Patrick Stevens, policy director at the Chartered Institute of Taxation.

The fact is that the Chancellor could decide to stage a quick Budget for political reasons, to whip up excitement and mark the launch of the new Tory programme.

He could even provide more detail about the staging posts to raising the personal allowance for income tax to £12,500. He could map out the route to a £50,000 threshold for 40% tax.

And he could toss in more discussion of his £1m inheritance tax allowance for couples passing on their homes.

On the other hand, it might look distinctly odd to start explaining so soon how his £12bn of further benefit cuts will be implemented.

It would only be weeks after the Conservatives had told voters - before the election - that they didn't know what the measures would be.

Chas Roy-Choudhury from the accountancy body, ACCA,  says Mr Osborne should "Hold fire!" and consult about some of the tax changes he is planning.

He argues there is plenty of time to look carefully at some of the plans, for instance the cuts to the tax relief high earners get on their pension contributions, which are complicated.

The fact is, we already have a list of pre-announced moves, from the March Budget or the manifesto:

£12,500 personal allowance, up from £10,600

£50,000 higher rate tax threshold

£1m inheritance tax allowance for couples (£325,000 each plus £175,000 each for family home)

No change to main VAT, income tax or NI rates

Triple lock promise to uprate pensions maintained

£12bn of further benefit savings,

Including freezing most working age benefits until April 2018, reducing benefit cap to £23,000, removing housing benefit from 18-21s on Job Seekers Allowance.

On pensions, reducing the annual allowance for highest earners, maximum contributions down from £40,000 to £10,000 a year.

And raising £4.6bn from further clampdown on tax evasion and avoidance

No comments:

Post a Comment