I didn’t used to like George Osborne as Shadow Chancellor. I wasn’t sure I liked him as Chancellor, but on the basis of today’s Budget he gets more ticks than crosses from me for his proposed tax changes – in fact he wins 13 – 8 on the following basis:


1. Accelerated corporation tax rate reduction. He is clearly aiming at a single rate, which will at a stroke remove most issues regarding associated companies, which will be a genuine tax simplification.

2. Personal allowance increase. This has to be the right way to legislate in favour of the less well-off, particularly with the accompanying reduction in the higher rate threshold.

3. Cash basis. Not exactly a new idea, but a welcome simplification for the smaller sole trade or partnership.

4. Statutory residence test. At last; the current situation of changing HMRC guidance and interpretation is intolerable, and some certainty in this area is desperately required.

5. Income tax & national insurance integration. A nettle long overdue to be grasped, this would again represent both a simplification of the tax system and an acknowledgement that national insurance is in fact a tax.

6. Standardised expenses for tax purposes for small businesses. Again a genuine simplification measure for small unincorporated businesses.

7. 36% inheritance tax rate for estates where 10%+ in value is given to charity. A most welcome incentive for taxpayers to leave a significant part of their wealth to charity.

8. Simplification of inheritance tax rules for trusts. Given that this is one of the most complex areas of tax legislation, again a welcome proposed simplification. 

9. 7% stamp duty land tax rate on £2 million+ residential property and anti-avoidance re: corporate structures holding residential property and sub-sale relief. This is likely to make SDLT much more robust and a better revenue-earner.

10. Disincorporation relief consultation. This has been a glaring omission from the tax legislation for countless years. A chance for all those lured into incorporation by Gordon Brown’s zero corporation tax rate to get out again?

11. Reduction in car emissions threshold re: 10% capital allowances pool and leasing restriction from 160g/km to 130g/km. Places a welcome premium on choosing an environmentally-friendly vehicle. My prediction is that within a few years driving a high emission vehicle will be as unpopular as smoking in public places is now.

12. Gift Aid small donations scheme. A small but vital improvement makes the minimum donation £20 instead of £10. No longer will I have to worry about who put what loose cash in the collection plate on a Sunday.

13. General Anti-Abuse Rule. Aimed at artificial and abusive tax avoidance, this will hopefully combat the large-scale avoidance activity of the banks, telecomms companies and others – hard for them to complain when the corporation tax rate is coming down apace.


1. Personal Tax Statements. Oh please! How much is it going to cost to produce and distribute 20 million of these each year? Spend the money on more effective HMRC action against tax evasion please.

2. Income tax charge to recoup child benefit from higher rate taxpayers. The government giveth with one hand and taketh away with the other – far too reminiscent of tax credits, albeit in reverse. Don’t pay it in the first place, rather than paying it and then clawing it back. How inefficient is that?

3. Cap on reliefs. Why should someone who speculates and makes a very large loss be unable to claim full relief for it for tax purposes? I know it is an anti-avoidance device, but it needs to be better targeted than this.

4. Top rate tax reduction. The Chancellor used the same argument again; it hardly collects any money, so how can he say it is a massive disincentive to enterprise? I don’t think we are that stupid, are we?

5. Company car benefit on zero and low carbon emission vehicles. Not sending out the right message on vehicle choice I would have thought, given the higher capital cost of such vehicles.

6. IR35 strengthening. It needs abolishing; it can have a coach and horses driven through it without too much difficulty, and trying to strengthen it complicates the tax system and wastes HMRC and taxpayer time. A knee-jerk reaction to public outcry about use of personal service companies in government.

7. No enhanced capital allowances for expenditure eligible for feed-in tariff receipts and the application of the 10% capital allowances rate to solar panels. Not content with b****ring up the feed-in tariff itself, the Chancellor has now made the installation of solar panels even less attractive. Do we want to generate energy in an environmentally-friendly manner or not? Talk about mixed messages.

8. 20% VAT on listed building alterations and removal of the reduced rate from charitable buildings. Talk about a double whammy for the Church of England! What have charities done to deserve this?

So in general I think a pretty good Budget. I have been agitating for a GAAR for ages, and the proposed concentration on abusive avoidance sounds to be pitched just about right. Moving to a single integrated corporation tax rate would be a big step forward, as would integrating income tax and national insurance. I also like the ideas of a return to the cash basis (but please don’t claim it as a novel innovation, George) and of standarised tax expenses for small businesses.

 My main reservation is that the government’s commitment to matters green still seems to be a little patchy, particularly the solar panel fiasco, which this Budget seems to have exacerbated rather than improved

Overall, maybe, just maybe, we finally have a Chancellor who means what he says about simplifying the tax system, despite the odd hiccup that suggests the contrary. Certainly if he can get the nation’s largest businesses paying their fair whack of corporation tax, he will have done this country a massive service. Watch this space…..

PS When WordPress will let me copy in my detailed Budget notes I will post them – may be tomorrow now though as my patience is wearing a little thin………..