Stamp duty to be addressed in Budget?
Budget predictions are running right up to the wire, as chancellor decides to make his speech two hours later than the norm at 3:30pm
Today is the day that all the questions raised by accountancy firms and the public will be answered. With the chancellor’s Budget speech being slotted for 3:30pm (rather than the expected 12:30pm), predictions will be released right up until Philip Hammond steps out of Number 11.
MHA MacIntyre Hudson has collated some insights from a variety of different voices within the firm, outlining what changes the Budget will introduce.
Neil Berry, tax partner at MHA MacIntyre Hudson, said: “With so much parliamentary time devoted to Brexit, it’s difficult to see too much time being devoted to the Budget. That could be a good thing. But, equally, it could be an opportunity to push changes through with little or no debate.”
Information surrounding this year’s Budget has been admittedly shrouded with ambiguity, meaning that predictions of any kind have been especially difficult to consider. Although, as MHA MacIntyre has identified, such uncertainty cannot be helped with the threat of a no deal Brexit.
“The challenge for the chancellor is not knowing what Brexit means for the UK,” Berry continued. “And [also if] he can improve the position for the UK before we know the answer to this. Whether change comes sooner or later, it looks like UK tax policy will be influenced by our relationship with Europe for some years to come.”
James Kipping, another tax partner for the firm, has stated that “after ten years of fiscal tightening there will need to be some changes to fund the promises the government has made, including the much talked about increase in health spending – £20.5bn per year by 2023-24.”
The easiest way to secure such an increase in revenue would be through the raising of taxes; however, this would be a far from popular political manoeuvre. Nonetheless, as Kipping has highlighted, “in terms of business, the government is acutely aware of the need to remain as competitive as possible internationally, and [the necessity of using] the tax system to encourage entrepreneurship.”
On the subject of stamp duty changes, MHA MacIntyre Hudson’s head of corporate international tax – Chris Denning – has said: “To stimulate transactional activity at home, the chancellor should consider reforming stamp duty. This is arguably a tax on the south east property market, and has led to a major slow down. This has a significant impact, as a mini economy revolves around every house transaction, from professional fees, DIY, and curtains being purchased.
“As a consequence, some developers are mothballing sites, which contributes to the shortage of housing. There is also an impact on retailers and building suppliers – some of which have gone bust. The taxation of real estate in the UK needs to be considered at a strategic level.”
With only hours to go until the Budget changes become something of a reality, it will be very interesting to see whether Hammond has addressed these points of concern.