This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
Budget promises sweeping tax reviews
“standfirst”>Put a red ring around 24 March in next year’s diary. That’s the date of the Budget. And it could be drastic because more than 1,000 tax exemptions and allowances could be removed or amended in it.
Sir Humphrey has been having a fine old time over the years. When George Osborne set up the government’s Office of Tax Simplification (OTS) earlier this year, experts predicted that it would come across between 400 and 600 exemptions, offsetting reliefs and anomalies that should be reviewed. But it has found 1,042 of them and the Chancellor has asked for recommendations on what should be axed or amended in time for the Budget. Meanwhile, accountants and finance directors will be scouring the list to decide whether to take action before changes are made.
Did you know, for instance, that on designated cycle-to-work days breakfasts provided for employees are exempt as benefits in kind from both income tax and national insurance contributions? Or that if your business premises are protected by a sea wall, repairs to it can be set against corporation tax?
No doubt the Treasury will lobbied by the Trinidad and Tobago government about retaining the exemption from excise duty of Angostura Bitters, a necessity for pink gin.
Will there be a march on London to make sure Osborne knows how angry Yorkshire tykes will be about any threat to the exemption from excise duty of black beer? There’s only one brand of this “fermented beverage made from malt and molasses, often without hops", Mather’s, which is brewed in Leeds and consumed mainly in the county. This fortified British (abv 8.5%) wine is mixed with lemonade as a long drink or with whisky, rum or brandy in winter warmers. It is also an ingredient in steak pies and Christmas puddings.
More important exemptions on the OTS list for review include the small brewers’ relief which halves excise duty for those who produce no more than 5,000hl a year and a similar concession to cider producers that was famously targeted by Alastair Darling in March and reprieved by Osborne in June – but only on the promise of a wider review.
Also on the list for reconsideration is the provision to delay payment of excise duty and VAT on goods until they leave an authorised bond. Any alteration to that arrangement could have dire implications on drinks company cash flows.
Such a measure is unlikely, however, and no doubt trade bodies will make strong representations to the OTS and the Treasury. More likely in the next budget will be tax measures to combat binge drinking.
Osborne has ordered a review by March and the Treasury’s recently published Business Plan says ominously: “The review aims to tackle problem drinking without unfairly penalising pubs, responsible drinkers or local industry.” Given the way the Treasury has treated the drinks sector over the past few years, it would foolhardy to place undue reliance on the word “unfairly.”
Finance on Friday, 03.12.2010
|
|