Lambert Chapman LLP make Pre-Budget Report predictions

On our main site we produced an article making predictions on the forthcoming Pre-Budget Report. Our material came from a number of Lambert Chapman personnel and the full text of their thoughts is included below. We would be delighted if you wished to add your own comments underneath.

Chris Harman 

Colin Timms, Financial Secretary to the Treasury recently said ‘It is right that taxpayers pay their fair share of tax.  However, there are a minority who continue to seek ways to avoid paying their share.  This is unacceptable.  It is unfair on the majority of taxpayers, undermines fiscal sustainability, and reduces funding for public services.  This Government will not tolerate tax avoidance schemes or tax evasion in any form, and will act promptly to tackle both of these’.

 From that statement which includes tax avoidance I must put as one of my top predictions that:

• HMRC will take the view that many things that are tax planning will, in HMRC view, be considered as tax avoidance and therefore many simple and standard tax planning actions will be disallowed. 

Other predictions:

• Corporation Tax : Small Companies rate to stay at 21%.  Main rate to stay at 28%.
• Income Tax : A 60% rate to be introduced for income above £250,000.  Environmental issue ; People who commute to work in their car and who are provided with free parking by their employer will have a taxable benefit on the provision of the parking space unless they also transport a passenger to their workplace.
• Capital Gains Tax : The rate to increase to at least 25%.  The Exemption to elect for a second home to be a Principle Private Residence (PPR) to be abolished.  PPR to be exempt only up to a fixed level of gain and any PPR gain over that level to be taxed at a rate that is less than the full CGT rate. 
• IHT : The £nil rate band to increase to £750,000.  A 50% band on Estates over £5,000,000.  Business Property Relief and Agricultural Property Relief to be capped.
• NIC : No changes.
• Stamp Duty : The £175,000 starting level for residential houses to be extended to £200,000 w.e.f 1/12/2009.
• VAT : The 15% rate will continue until 30th June 2010 from when it will be 20%.  The reduced rate of 5% for domestic heating will be increased to 10% w.e.f 1st January 2010 (I must get my next lot of oil ordered!)
• Wealth Tax : A new tax which will be 0.25% on assets, anywhere in the world, owned by a U.K. domiciled resident where their Open Market Value at 31st December each year exceeds £5,000,000.  The rate will be increased or the excess level will be reduced in the tax year during which people emigrate.
• The proposed alignment of our fiscal year to be moved to a calendar year and therefore inline with much of the world.
• Beer and spirit duties : The duties will remain the same but steps will be put in place to set minimum selling prices so that supermarkets can’t sell cheap alcohol.
• Road Fund Licence : Increases on ’unfriendly vehicles’.  The lowering of the emission bands for ‘friendly vehicles’.
• Funding for the building of more Universities to start in 2013.  This will be because more people will have to have a ‘degree’ before they can undertake their chosen work* and will also be seen as giving the Construction Industry a boost following on from the Olympics building work.  Measures will be brought in so that ‘one man band’ and ‘labour only’ construction workers will have to be employees and not self employed if they are to work on any such projects.
• The ‘remittance basis’ for U.K. residents who are not U.K. domiciled will apply to those who have been U.K. resident for five of the last seven years (instead of 7 of the last 9 years).
• Long term unemployed without any qualifications will be offered a cash inducement to travel to interviews and jobs (for the first year of work). Those who have studied and worked will have to get on with it without any help). 

I heard on the radio this morning that all new nurses will, by 2013 (funny that is after the Olympics!) have to have a degree before they can become a nurse.  I know that they have to undergo learning and need a degree or a diploma to be a nurse (they can start nurse training with no qualifications), but, the radio report only mentioned a degree so is a diploma out of the window?  Isn’t nursing a vocation?  I can foresee other trades will be pushed towards having to have qualifications i.e a butcher needing something in the field of chemistry combined with biology!

Gill Philpott and the Tax Team

Capital gains tax rate to rise to 25% to cut the differential between income tax and capital gains tax which has in the last year led to tax payers seeking to tax events as capital rather than income

To assist the property market the retention of the £175,000 Stamp Duty Land Tax exemption

Introduction of anti avoidance legislation aimed at removing tax advantages of employee benefit arrangements

Another deferral on the introduction of the income shifting rules due to difficulties in drafting the legislation

A measure to penalise ‘fat cat’ city bonuses – perhaps in the form of a punative National Insurance Rate,

and of course the perenial favourites years measures to promote green issues and measures to penalise the drinkers and smokers and drivers of fuel guzzling cars

Something we would like to see but don’t think will be introduced profit averaging for all businesses and not just farmers and artists to help businesses even out profits, tax and therefore cashflow between the good and bad years.

Mike Carabine

Mike Carabine

The standard VAT rate is due to go back up to 17.5% from 1 January 2010. However I predict the increase will be delayed 1 or 2 months but will rise to 18% (possibly even as far as 20%).

Potentially reducing the range of supplies qualifying for VAT zero-rating, blaming EC legislation whilst increasing the amount coming into Treasury coffers.

More attacks on tax avoidance schemes.

Corporation Tax for small companies to rise to 22% as was meant to happen from 1 April 2009. Rates for large companies to continue to fall.

Nigel Whittle 

Increase the Capital Gains Tax rate to 30%

Lisa Potter 

I believe that Government will be playing their cards close to their chest.  With an election around the corner they would be suicidal to make any radical announcements beyond those already in place without further risking their chances of being re-elected.    

 The one announcement to keep an eye out for will be the VAT rate from 1st January, I believe that this may be announced at a higher rate than the 17.5% previously in place.   Regardless of what the rate is, businesses will once again suffer from the inconvenience of the administration burden as a result of the change and many will remain confused as to what income falls under what VAT regime.

 I believe that the 50% higher rate will be fully implemented for forthcoming tax periods.   As for corporation tax I would like to see some changes to the rate for smaller companies, larger company’s have benefited from decrease in rates whilst the smaller company rate has increased.  In light of the current climate this should be addressed to assist those businesses that are in more need of the assistance.      

Overall I think it will be a non-eventful Pre-Budget report based more on the protection of their re-election chances than changes to legislation that will lose them votes.

Richard Thomson

With the next election looming, I think they will be looking for increasing support from voters whilst trying to increase revenue, by delayed measures and targeting higher earners.

Therefore unlikely to increase VAT, Corp tax etc in short term.

Likely to have notional ‘feel good’ announcements:

• Gift to pensioners – extra winter payments,   tax benefits etc.
• Revision of tax credits with increase to lower incomes.
• Further adjustment to ISA’s and encouragement of savings.

And will also have:

Increasing tax on wealthy – perhaps reducing the £150K 50% band.

Increasing NIC on high earners – increasing rate, upper band.

Focusing on Green issues and tax incentives, with additional tax charges for those not being green.

Increase to CGT rate of 18%, which is relatively low.

Revision to IHT to assist middle England – which as house prices have fallen, won’t be as dramatic as many claim.

and of course:

preventing Income shifting, introducing NIC on close company divi’s, increasing tax avoidance schemes etc.

‘Le plus ca change le plus ca la même chose’

Mike Carabine

All the Arsenal fans amongst you will immediately recognise the 19^th Century French proverb, the first documented usage of which was in a work by the great Alfonse Karr. More familiar to the rest of us is the translated version in George Bernard Shaw’s “Revolutionist’s Handbook” in 1903, “the more things change, the more they stay the same”.

 

 

 

When I wrote my last blog on 1^st September, the sun was shining, I wasn’t the co-owner of several High Street banks and West Ham United were bumbling along under the tutelage of Alan Curbishley. Looking back some of my comments were strangely prescient if you consider subsequent events;

 

·         3^rd September – AC decides he has been undermined by the Director of Football and quits.

 

·         12^th September – XL, our shirt sponsors, go into administration. Cue much embarrassment as we have to play firstly with naff patches on the front of our shirts and then duplicate shirt numbers. It emerges that Bjorgulfer Gudmundsson has taken over the bank debt personally before the XL Group goes under.

 

·         7^th October – Landski Bank, owned by BG, goes into administration too.

 

At least the way in which we went about securing a new manager gave the impression that we knew what we were doing, with short listing and interviewing taking place swiftly and with a minimum of fuss (at least compared to Our Friends in the North East!). The fans favourite would have been Slaven Bilic but he couldn’t be persuaded to forsake Croatia (or wasn’t considered depending on who you believe). So we end up with Gianfranco Zola as boss, a fine footballer who played in a style West Ham fans appreciated, but with little practical experience of managing and even worse a Chelsea legend!

 

A reasonable start has transformed into a terrible current run and a match against one of our bogey sides, Everton, was not what the doctor ordered. Last December I headed to a freezing Upton Park and watched us throw away an early lead in a Carling Cup quarter-final, with Yakubu profiting from a mix up between Danny Gabbidon and Rob Green to score the winner with a couple of minutes to go. On Saturday I was heading back to the pub after playing in a 2-0 defeat but at least cheered by the news that the Irons were ahead. As we hit the outskirts of Chelmsford, 5Live flashed over to the Boleyn Ground and my worst fears were realised 1-1. When two minutes later they went back my heart sank, 1-2. When a further goal was announced almost immediately after I made the fatal mistake of thinking we had equalised – oops!

 

The last time we kept a clean sheet was back in February, the worst run ever by a Premier league side. Rumours abound that the Club is to be sold, but who will buy with a possible £30m + payout to Sheffield United hanging over us?  

 

Still things could be worse I suppose, Alan Curbishley could have been successful in his rumoured pursuit of Joey Barton at the end of last season!

Chance of a Lifetime

Mike Carabine

At the March committee meeting the club I have played for over 25 years, Beacon Hill Rovers, decided to nominate ourselves for the County Charter Standard Club of the Year for Essex more in hope than expectation.

 

The Scheme looks at both the playing and non-playing aspects of a club, so as well as coaching it covers child protection, administration, disciplinary and development. The Scheme is open to ALL clubs below league level, so locally we were potentially up against Braintree Town, Witham Town, Chelmsford City and the like. So imagine our delight when in June we were invited to the Waterfront to collect the County award.

 

Part of the award offered three lucky Under-10’s the chance of a lifetime to carry out one of the pre-match flags before the crucial England Under-21 qualifier against Portugal on Friday 5^th September. Imagine my pride therefore when my son was one of the three chosen to carry out this duty. As soon as he found out, he phoned everyone he knew to tell them – his excitement turned up to 11.

On the day the Essex FA had laid on a coach for all the boys and accompanying adults, arriving at Wembley in plenty of time before their duties were due to start. For those of you who have not had the pleasure of going to the new stadium, I must recommend it. As you approach by road it looks a fantastic sight, the Arch more than making up for the loss of the Twin Towers. After leaving the boys to get their kit sorted, have a tour of the stadium, eat and then have a practice of what they would be doing later, the adults were treated to a pleasant meal at the Wembley Plaza Hotel, again courtesy of the Essex FA.

Upon our entry into the stadium we were shown to our seats above the corner flag. What struck me was, despite its size, the arena seems quite small, an effect of the extended roof constructions most of the way round. The consequence of this is that you feel closer to the action than you really are.

7.35pm: As the teams take to the pitch, the first flag out of the tunnel is a blue “Respect” banner, supporting the new FA campaign to encourage players, coaches and spectators not to harangue and abuse match officials. Immediately we spot that the three bearers our end are the members of our club – little old Beacon Hill; on the pitch; at Wembley! They carry out their duties without falling over or kicking Ricardo Vaz Te and are brought back to sit with us for the game.

To be honest for much of the first half the boys would have been better off still under the stands, as the match was pretty dire. Considering Portugal needed to win to top the Group, they made no real effort to get forward. England played with Gaby Agbonlahor up front on his own supported by a midfield five. For this to work effectively you either have to get it in to the frontman’s feet and play off him or get the two wide men playing in more advanced positions and playing almost as wingers. For most of the first 45 minutes we managed to do neither very well, but just before half-time a soft penalty was awarded to England, which James Milner tucked away.

My only cause for a moan during the whole day came at the half-time interval. The cost of refreshments at Wembley has been well publicised, so I was prepared for the extortionate prices. However what did come as a shock was the speed of service and the fact that when we did finally get to the front of the queue half the menu was off! All this on a crowd of just over 27,000 – so what must it be like on Cup Final day?!!

The second half saw a better performance and when Mark Noble slid a great through ball to Mr A, who then finished casually, it was game over. Portugal eventually mustered a couple of efforts, which Joe Hart coped with easily, leaving England 2-0 winners to finish top of the Group. In a strange twist, this does not guarantee a place in the finals as there is a two-legged play-off before that.

I must commend the FA with regard to ticket pricing for this game, with it being only £10 for adults and a fiver for children. Given that most of the England side were regular performers in the Premier League, and the importance of the match, I thought that was good value and would consider going again in the future. Even better for me, the England side selected included players from a number of clubs not just the three or four that dominate the main England team.    

On the way back on the coach we had a bunch of tired but elated children, who were soon fast asleep. Although their enjoyment of the whole experience was clearly immense, I don’t think that at that age they can appreciate what an honour it was for them and how lucky they were to get the opportunity. Hopefully in years to come, when they look back and remember 5^th September 2008 they will.

 

 

 

 

“It’s not the despair, I can stand the despair; it’s the hope …”

Film buffs amongst you might recognise the above quote which came from the 1986 film “Clockwise”. For those of you who haven’t seen it, it is about Brian Stimson, a headmaster who is a stickler for punctuality, and his misadventures in getting to an important meeting. Mr Stimson was played by a certain John Cleese, who is well known for his work in Monty Python, Fawlty Towers and A Fish called Wanda.

 

Less well known is the fact that he an ardent West Ham United fan, which might explain his forte for manic expression, bouts of depression and occasional moments where his pent up frustrations boil over into aggression. His years in therapy are well documented, although nowhere I have seen has identified whether his attendance was due to professional pressures, personal problems or simply that we had dropped another three points due to our inability to defend properly.

 

The titular quotation aptly sums up my feelings about supporting the Irons. Perennial underachievers with any sporadic moment of success matched soon after by a dismal failure of some sort or another. My expectations for this season were low and, three games in, I have seen nothing to change my mind, despite us being in the Top 3 for a brief while on Saturday. From the matches/ highlights that I have watched we were lucky to get a victory against Wigan on the opening day, we were totally outplayed by Manchester City even prior to Mark Noble being sent off and in serious danger of being embarrassed by a Macclesfield side that managed to lose 6-0 at the weekend.

 

From Alan Curbishley’s point of view a visit to Upton Park by Blackburn Rovers was just what the doctor ordered, with the crowd having a manger to dislike more than their own man for once! It was 19 years ago that Paul Ince made that serious misjudgement in getting photographed in a Manchester United kit before the deal was done and dusted for him to move to Old Trafford. Hammers fans do appear to have long memories and, although the abuse was not as bad as most feared, the Guv’nor was asked most vociferously if he knew the score at the end of the match, which saw us claim another flattering victory.

 

I am worried however. The Credit Crunch was always going to be an issue for us, given that Bjorgulfer Gudmundsson our Icelandic owner earns his crust in the banking sector back home. It also became clear that as popular a figure as the Eggman was, his largesse in terms of players’ contracts had put unnecessary strain on the club’s finances. Finally there is Mr C’s penchant for buying players who spend more time on the treatment table than the training pitch. The combination of these three factors has seen Freddie Ljungberg walk away with bulging pockets, Anton Ferdinand decide that the North-East looked a better bet than the club he had been with since school, decent squad players sold without replacement and various rumours of key men being lined up as the next to be off.

 

Still things could be worse I suppose, we could have spent £5m on Dos Santos only to find out he is too lightweight for the hurly burly of the Premier League. As my friend Mr Cleese might have said in one of his many guises, “It’s alright – he came from Barcelona!” 

 

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