ALL QUIET ON THE BUDGET FRONT

The Chancellor's latest Budget has been branded a "whisper" by top 40 accountants Bishop Fleming.

Fearful of upsetting voters ahead of the EU Referendum, George Osborne's headline tax measures were almost inaudible, as he tip-toed through the Budget, claimed the firm.

The personal tax allowance will increase to £11,500 from April 2017, giving a further tax boost to low income earners. Those on higher incomes will now be able to earn up to £45,000 from that date before having to pay 40% income tax.

Savers will have a new annual ISA allowance from April 2017 of £20,000, as well as a new Lifetime ISA of up to £4,000 for any adult under 40. This could be the precursor for an ISA pension in the future.

Bishop Fleming welcomed the 8% cut in Capital Gains Tax (CGT), which last year raised more for the Treasury than Inheritance Tax. The reduction will not apply, however, to sales of residential property - a further attack on landlords, claimed the firm.

Corporation Tax got a mention in that the rate will reduce from the current 20% to 17% by 2020, which will be welcomed by business owners. Though there will also be further crackdowns on corporate tax avoidance and the use of personal service companies.

Change to stamp duty for commercial property. From midnight tonight it will be banded at 0% up to £150,000, 2% above that to £250,000 and then 5% on any amount above that.   

Redundancy payments will attract National Insurance from April 2018. The Chancellor called this a tax avoidance measure.

Two new tax free allowances of £1,000 each for micro business that use the internet were announced to help avoid unnecessary form filing. Small businesses will also be helped with reduced business rates. Some businesses will now pay no business rates at all.

Bishop Fleming partner, Andrew Browne, commented: "Apart from welcome reduction in the rate of CGT and corporation tax, there was nothing major in the Budget. The Chancellor preferred instead to continue his tinkering."

Mr Browne continued: "George Osborne had properly boxed himself in with what he could do with the economy, due to his self-imposed and legally binding duty to deliver a Budget surplus by 2020, and rate locks on income tax, VAT and National Insurance. He had to be more creative in how he raised revenue, so he hopes to gather more from new anti-avoidance measures."

"With pension tax changes placed on the back burner for now, Osborne's room for manoeuvre had been further restricted," he added.

The Bishop Fleming partner also noted that most businesses had been braced for an increase in petrol prices, "but having frozen fuel duty yet again there was a tangible sigh of relief," he said.

According to Mr Browne: "Scrapping Class 2 National Insurance for the self-employed from April 2018 is a worrying event, as this will give the Chancellor the chance to increase Class 4 NI from 9% to 12% to bring the self-employed into line with employees. Class 2 NI buys the self-employed welfare benefits, so scrapping it allows him to raise Class 4 by the 3% and give these benefits in return - a simple tax raising measure he is yet to announce."

END

FURTHER INFORMATION:

• Andrew Browne:abrowne@bishopfleming.co.ukor 01392 448800

• Julian Cramp:jcramp@bishopfleming.co.ukor 01392 448800

NOTES TO EDITOR:

• Bishop Fleming is a UK Top 40 firm of accountants with offices in Worcester, Bristol, Bath, Exeter, Torquay, Plymouth and Truro.

• Bishop Fleming has been ranked 49^thin The Sunday Times 100 Best Companies to Work For.

• Bishop Fleming was shortlisted for "Top 50 Tax Team of the Year" in the British Accountancy Awards 2015.

• Bishop Fleming was highly commended for the "Mid-Tier firm of the Year" in the British Accountancy Awards 2015.

• Bishop Fleming won accreditation as an "Outstanding Investor in Clients" (Investors in Customers) in 2015.

• Bishop Fleming was listed as one of the 4 "Best Employers" by Accountancy Age in 2013.

• Bishop Fleming was the first UK accountancy firm to win "Investors in People" accreditation (and has secured re-accreditation ever since).

• Bishop Fleming is a member of Kreston International, a network of independent accounting firms in more than 100 countries.

• The firm focuses on serving and championing owner managed businesses and has sector teams specialising in:

• Academy Schools

• Charities, Schools, and not-for-profit

• Healthcare including Care Homes, Dentists and doctors

• Hotels, Leisure & Tourism

• Manufacturing Technology and Innovation

• Renewable energy

• Property & Construction

• Media & Creative

• Professional Practices.

• Bishop Fleming is unusual in having:

• A full-service payroll operation

• An independent financial advisory service (IFA)

• Tax Partners with international experience

• A VAT Director and a Technical Tax Manager.