The 2011 Budget was an important test of the coalition government and the Chancellor.
There were no real surprises in relation to indirect tax – but that in itself is unsurprising, partly because the main taxes, VAT and Customs Duties, are European taxes so the opportunities for a Chancellor to make changes are very limited, and partly because most VAT changes need not wait for th
Returning the UK economy to strong sustainable and balanced growth requires a new model that is driven by investment and exports.
The Budget was a pretty decent one for business. No-one will be happy with everything in it, but we can be pleased with a good proportion of the measures.
Charities will no doubt welcome the proposed simplification of Gift Aid, and the inheritance tax incentive to leave over 10% of your estate to charity.
While fuel duty, income tax and corporation tax ‘giveaways’ took the Budget headlines, the CIOT’s attention was drawn to a range of reforms and proposals which could, if they fulfil their potential, make our tax system simpler, more certain and more transparent.
The staged increases in the basic personal allowance to £10,000 will take many low income people out of tax. But it will not necessarily make them better off, because of the complex interaction of the tax and national insurance with the benefits and tax credits systems.
The government’s new approach to making tax policy inevitably leads to an extended timetable for the introduction of new tax laws.
This government is adopting a more strategic approach to avoidance that gets to the root of the problem rather than treating the symptoms. That is the thrust of Tackling Tax Avoidance, released on Budget day.