According to ACCA (the Association of Chartered Certified Accountants), this was a political Budget focused on a range of populist measures, as was to be expected this close to the General Election.
Chas Roy-Chowdhury, head of taxation at ACCA commented:“As you’d expect so close to the General Election, this was a political Budget from a political Chancellor.
“It contained a number of welcome measures that will go down well with voters from a range of economic backgrounds such as a further increase in the personal tax free allowance to £11,000, a new fully-flexible ISA and the new first-time buyer bonus.
“It was also encouraging to hear the Chancellor give a supportive reference to the passage of the Corporation Tax Bill that has just gone through both Houses of Parliament. Like the Chancellor we want to see the Northern Ireland Executive working together to make this legislation a reality for Northern Ireland businesses.”
On the announcement from the Chancellor of a reduction in lifetime allowance from £1.25m to £1m on pensions, Chas Roy-Chowdhury said: “This is not the right way to deal with long-term investment. Every year the Government steps in and moves the goalposts.
“The Chancellor should exercise caution when meddling with the pension pots of those who have been contributing to them for 30 to 40 years in many cases. They are heavily relied upon by those looking to retire and care should be taken not to jeopardise their future.
“As expected Osborne continued with the policy of greater flexibility for pensions by allowing the sale of annuities. The big challenge for the Chancellor is to create a fair market for these sales.
“What the Chancellor didn’t make crystal clear was the tax implications of withdrawing a lump sum. There is the potential for a large number of people to get quite a shock when they find out they will have tax to pay on their money should they wish to get their hands on it.”
On the Chancellor’s plans for fighting tax avoidance, Chas Roy-Chowdhury said:“Combating tax avoidance has been a key plank of this Government’s rhetoric for the last five years, so today’s announcement came as no surprise.
“We are disappointed that the Chancellor has chosen not to wait for the OECD’s important work with the G20 to be completed before pressing ahead with his plans. Any measures must be backed up with additional resources for HMRC otherwise they will be nothing more than headline grabbing soundbites.”
On the news that the Government will phase out conventional tax filing by as many people as possible, Chas Roy-Chowdhury, head of taxation at ACCA said:
“This move to the brave new world of digital tax returns will allow people to have a holistic view across the range of taxes they pay. As well as settling their taxes, taxpayers will be able to amend their tax codes and even pay their parking fines online, which is welcome news.
“Many of those filing paper self-assessment forms are self-employed people and those running small businesses across the UK including Northern Ireland have been using the postal method for many years. SMEs in Northern Ireland need to be given access to resources which will help them move the process online to ensure they aren’t left behind.”
It was however disappointing to note that the starting point for paying National Insurance Contributions was not increased alongside personal tax free allowance Chas Roy-Chowdhury said:
“ACCA has called for this since the Chancellor began raising the income tax threshold in 2010. The NIC’s bands need to be raised in line with personal tax free allowance to ensure the amount of tax people pay remains consistent and fair for all.”
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For further information:Shane Finnegan or Katrina Frazer, Aiken PRtel: 028 9066 3000email: firstname@aikenpr.com
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 170,000 members and 436,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 91 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com
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