YOU MIGHT NOT have noticed the chancellor’s reference to the Office of Tax Simplification.
It was some three-quarters of the way through yesterday’s Summer Budget speech, with George Osborne generously welcoming the ‘fantastic work’ undertaken by its key staffers John Whiting and Michael Jack.
But what Whiting and Co would have thought about the slew of changes, and tinkering around the tax system yesterday, may well be another matter.
It was in many ways an exciting Budget. But that’s because ‘no surprises’ Budgets are dull. Yesterday’s was much more fun because it was full of the unexpected, notably the announcment on the Living Wage which had former quiet man Iain Duncan Smith punching the air. Unfortunately, for many people, Budget surprises are no good thing.
Changes to the non-dom regime and the taxation of dividends were not exactly pie in the sky – particularly as these have been subject to scrutiny in recent times – but they certainly weren’t trailed.
Some might argue “what’s the point of the Budget if we know everything anyway?”
The issue, wherever, is more about direction of travel. Tax certainty and simplification, a double-pronged strategy of the last government, seems to have fallen by the wayside, despite Osborne’s insistence that the OTS is of great importance.
Bigger (Budget) picture
There are greater pressures that have come to bear on this Budget. Continuing austerity without pushing anyone over the edge is really the theme. The ‘pain’ has been spread out again, with the middle classes taking a hit alongside the benefits cuts. Growing concerns about the viability of the NHS, MOD and HMRC have been noticed by the Conservatives, hence more funding made available.
Osborne has also needed to made some business friendliness – with corporation tax being cut and the bank levy being redirected towards profits: a politically astute move.
But when it comes to business owners, tax advisers and finance directors, they will look at the tinkering made by Osborne, and the billions more he wants HMRC to collect, and see a less certain, definitely more complex, tax landscape than was promised in 2010.
I wish the Office of Tax Simplification the best of luck.
Kevin Reed is editor of both Accountancy Age and Financial Director
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