Member Article

Budget 2014: now is the time to encourage investment and growth

George Hardey, Senior Tax Manager at Waltons Clark Whitehill looks forward to a Budget which may be tempered by its proximity to next year’s General Election.

He said: “As we move away from the downturn, it is vital that investment and growth are encouraged over the course of the next couple of years and beyond, whichever Party wins the next General Election.

“In a budget that is just over twelve months before a General Election, we can’t really expect to see anything controversial, as the Chancellor won’t want to hit voters too hard. It will be a budget that looks like it gives more than it takes, maybe with something to keep pensioners happy.”

For the rest of us, George expects little change but cautious hopes include

• A small rise in the Personal Allowance, now that it has reached the promised level of £10,000.

• A small rise in the higher rate threshold. Any change in the top rate of tax of 45% would be unexpected – that will perhaps be held back until the Autumn Statement in December.

• Possible changes to the level of Employers’ National Insurance if a boost in employment is a priority.

• A flat rate of Corporation Tax of 20% is to apply from 1 April 2015. Therefore, changes would be unexpected but a rate of 18% or 19% would make the UK’s corporate tax regime even more attractive to incoming businesses.

• To simplify corporation tax rules even further, the introduction of a system of up-front payments on account for all companies rather than just the largest would not be unexpected. However, the impact on cash-flow of corporate businesses would have to be considered carefully.

• An extension of the Annual Investment Allowance is likely as the current level of £250,000 is due to fall back to £25,000 from 1 January 2015.

• A must is a further crackdown on tax avoidance schemes, as we have seen considerable activity by HMRC in this area in the last twelve months.

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This was posted in Bdaily's Members' News section by George Hardey .