Budget breakfast briefing hears from the experts
- Publish date: 24 November 2017
- Archived on: 24 November 2018
The morning after the Chancellor delivered his Budget speech, LSCA members heard over breakfast from economic experts and tax advisers about the economic outlook and how the tax measures could affect them.
The Breakfast was held on 23 November 2017 at Chartered Accountants’ Hall. As in recent years, it was presented in conjunction with the City Branch of The Institute of Directors, and was introduced and chaired by Adrian Mansbridge, LSCA Vice President and Chairman of its Taxation Committee. The closing remarks were given by David Stringer-Lamarre, Chairman of the IoD City Branch.
Setting out the economic context and implications of the Budget at the LSCA’s annual breakfast event, Warwick Lightfoot, head of economics and social policy at Policy Exchange, said that the UK was roughly two thirds of the way through a necessary fiscal repair of the its public finances. It would take about half a generation to eliminate the structural budget deficit and reduce the stock of public debt that was presently too high in relation to GDP.
Warwick said: “For several years the economic forecasts presented in the Budget Redbook have looked unrealistic. The decision to publish a much more realistic economic growth forecast, which may even turn out to be a little on the cautious side, is a positive step.
Among the individual measures, the support for science and recognition of the important work of the competition authorities, such as the Competition and Markets Authority, together with progress in raising tax allowances, are welcome.”
Warwick concluded by saying that he was fairly optimistic about the economy although the UK would need to increase spending in a number of areas such as long-term care for the elderly and defence, and that public sector pay would come under pressure. There needed to be more debate in parliament and elsewhere about what criteria should be used to set targets.
Summarising the practical tax points, tax adviser and President of ICAEW Chartered Accountants Croydon Andrew McKenzie-Smart said: “After all of the discussions regarding the Paradise Papers in the press, the Chancellor’s Budget sets out that in the UK we are a long way from paradise. The most significant tax change is the abolition of SDLT for first time buyers on properties up to £300,000, a welcome Christmas present for those benefitting.”
Andrew then ran through some of the other important tax announcements, including highlighting a number of forthcoming consultations, such as whether capital allowances should be replaced by depreciation, alternatives to the dispute resolution procedure, financing growth in innovative firms and the future of disincorporation relief. There would also be further consultation in due course about extending the digital taxation regime.
He said that the Chancellor was continuing to reduce the rate of corporation tax, designed to maintain the UK’s economic competitiveness. To encourage innovation, an advanced clearance procedure would be introduced for R&D expenditure and the credit was being increased from 11% to 12% from 1 January 2018.
There would be consultation on ways of tackling non-compliance with IR35 in the private sector. Once again various new anti-avoidance measures were to be introduced and changes made to the TAAR.
For further details about the LSCA Taxation Committee, please contact Gay Jordan, Secretariat Consultant of the LSCA.
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