An exciting 2011 Budget?
What will you be doing this time next week? Poring over the details of the 2011 Budget like me? Or maybe you have a life...
Anyway, for those interested, there are some shoe-ins that can predicted with reasonable accuracy, some slightly left-field ideas from various sources and some unlikely, but interesting concoctions of my own making.
Things we are expecting include a beer tax escalator adding 2% on top of inflation, or about 10p a pint to you and me. Fuel duty is also due to go up from 1 April, but with the crippling current pump prices caused by the January fuel duty rise and the VAT increase, not to mention the oil companies adding a bit on for themselves, postponing this increase would be an easy way for George to make friends. Hey, everyone needs one...
Further changes to capital gains tax are unlikely after last June’s unprecedented mid-year rate change, but the annual allowance of £10,100 has been frozen for the past two years, so an increase may be on the cards. Similarly, the inheritance tax threshold had been due to rise to £350,000 last year, but this was also frozen, so we could see an increase here too.
However, the Office of Tax Simplification decided not to look at inheritance tax reliefs as part of its reliefs review, as it decided IHT was just too complicated altogether. And they are supposed to be clever types. A radical overhaul could therefore be on the cards, although traditionally IHT reform is not seen as a classically Tory objective. The OTS in their wisdom have also made some outer space style suggestions on small business taxation- such as fixed amounts for expenses (ie not what you actually incur), possibly based arbitrarily on turnover.
But a Budget with no surprises is essentially just a load of politicians in a room, so I would recommend some of the following, to add some sparkle to the day.
- Instead of combining income tax and national insurance, which is currently being pushed as a great idea, why not just scrap national insurance altogether. It'd be a popular move.
- Scrapping Air Passenger Duty is also a hot topic- but why not replace it with a progressive version- people going to the most desirable destinations pay the most, and those going to Spain get a rebate?
- Finally, leader of the opposition Ed Miliband is calling for a sequel to the financially successful Bankers Bonus tax. I say why stop there, why not also add a tax on w...