Lambert Chapman LLP’s Chris Harman reviews the 2012 Budget

Was this the Budget with the most leaks?  There have been many media reports of what was and was not going to be in the Budget and I wonder whether it was also being used as an indication of the coalition working or not working or maybe it was to ‘test the water’ and see the response of the Electorate.

This Budget was introduced as one to announce wide reaching reforms to the tax system and to reward work and support growth and the tax system is to be fair and simple.  Good so far.

Support growth: The Budget introduces a capping of uncapped tax reliefs to a maximum of 25% of income of £50,000 (if higher).  This means that where there are tax incentives offered to individuals the Government wants to be seen to offer an incentive but to curtail the amount of relief an individual can receive.  Hardly an incentive for wealthy ‘business angels’.

Fair and simple: The withdrawal of Child Benefit for high earners doesn’t strike me as fair and the rules for the withdrawal of that benefit for those high earners doesn’t strike me as simple.

What is going to be the benefit of issuing tax statements to 20 million taxpayers to show them what taxes they have paid, their average tax rates and how the tax has contributed to public spending?  HM Revenue & Customs systems are already struggling with getting tax liabilities and PAYE codes and penalties sorted out so they don’t need another form to cope with.

The main rate of Corporation Tax is to be reduced to 24% and over a couple of years will be 22%.  The small profits rate stays at 20%.  This bringing together of the rates is fair and significantly reduces the ‘margin trap’.  It is good to see improvements in the tax benefits for undertaking Research & Development as is the reduced rate of Corporation Tax for profits from qualifying patent income.

Where are the real incentives for the growth of manufacturing in the UK?  There may be a reasonable percentage increase but the UK needs to see a reasonable monetary increase and to do that the manufacturing industry needs more incentives and support.  Likewise for our hardworking exporters.

For income tax I have mixed feelings about the increase in the level of personal allowances because those who were earning less than the old allowance won’t have any benefit if the allowance is increased.  I am surprised by the pegging of age allowances with a view to phasing them out.  Our pensioners have seen their investment income drop and costs go up and now see their tax allowances eroded.  If age allowance is being reduced then why not allow an element of the State pension to be tax free?

We expected changes to Stamp Duty and we have probably had more changes to it in this Budget than we have seen over the last few years.  The new 15% band on properties costing over £2million will mean offshore companies will fall out of favour.  Properties costing over £2 million will now have a 7% Stamp Duty so buyers will still want to do something to mitigate it.  I would have thought a reduction to 4% or 4 1/2% for properties costing over £1 million would probably bring in more Stamp Duty as it is not too penal.  I expect genuine foreign property owning / investing companies will think twice about buying in the UK.

National Insurance is a burden for employers.  I would like to have seen a return of the National Insurance Contributions ‘holiday’ whereby reduced rates of NIC apply for a time for newly employed staff.  Why not extend it to the NIC paid by the employee?  I think it would encourage the employment of new and young staff.

Not too many changes in Capital Gains Tax and VAT and Inheritance Tax.

I am intrigued by the strategy for gas generation; I understood that our gas reserves are low and we buy in from abroad.  How are we going to generate the gas?  Oil has been depleted, wind power seems to be falling out of favour, solar power tariffs have been reduced and wave power hasn’t proved itself.  I can only think it will be from waste products; I wonder how the efficiencies and green credentials will pan out?

I do so want to see the UK climb out of this recession and be the strong economic force it once was and whilst this Budget is a step in the right direction in a number of areas I don’t feel it is one that will motivate the country.

We have a Movember winner

All is back to normal with the top lips of most of the Lambert Chapman LLP “Hairy Accountants – Continued” team following our moustache growing exploits during Movember. On 30^th November our judging panel of Gill Philpott, Sue Stedman, Tracey Yeo, Jacqui Ford and Debbie Monk visited each team member to assess their achievements. After deliberations Chris Harman was awarded a silver medal and John Smith-Daye the blue riband for their individual achievements. Thankfully no booby prize was awarded!

So it is over to you to decide if they got their deliberations correct and maybe add a few pounds to that we have already raised. If yopu want to donate click the logo to go to our page on the Movember site. 

We didn’t set out to break the bank with our fundraising but Nick and John would like to thank all those that generously donated funds to them at various functions that they attended. They also included current sufferers who were pleased that we were spreading the word.

As we said earlier most top lips have returned to normal but for our winner there was a further dare to undertake. Our Maldon neighbours Bright & Sons challenged John to remove half and have what remains painted blue which he dutifully did on Friday.

As we write we understand that the half remains but the blue has disappeared so we feel duty bound to share with you how it looked!    

Two men down but Movember challengers move forward

What a difference a week makes. Unfortunately we are two down, one through a lack of growth and one with a cheque for £100 in hand but everybody else continues at different levels of performance. 

Taking first the abstentions Nigel having been humiliated at home by nobody noticing that he was still taking part took an executive decision to grasp his razor as a meeting at a Barristers office with a new client awaited him in the morning. 

Sean on the other hand made it to Friday evening when the “enough is enough” call from his beloved wife Deb. Her original £50 bid had increased to £100 by midweek in order to get through the weekend Sean took the cheque and called a halt. Unfortunate though that is the shaving cream accentuates the moustache that was developing. Rumours abound that one of the stronger contenders had brought outside pressure to bear….

Elsewhere, (and as expected) Mike continues to grow at a pace putting pressure on those fairer haired individuals like Josh and Nick. John and Lee are also doing well but have been away from the office so we have little, apart from verbal embellishments, to report. 

Chris, however, has continued to keep you guessing with some thoughts on the decision tree in front of him as to which selection he should make. The trouble is that the selection is wide as our grid below shows and what we’ve come across on networking events are “creatives” who have been thinking out side of the box. 

The main purpose though is to get a message across regarding Men’s health and if you fancy donating to the cause you can do so by clicking the Movember logo to the right.