My guess is that practitioners will be underwhelmed by the budget announcements on 22 November.
Perhaps we should consider the budget that never was? What have we narrowly avoided?
In first place we should surely ruminate on the OTS’s proposal that the present VAT registration threshold is too high. At £85,000 they may have a point. In Spain there is no registration threshold, all for one, one for all… Germany’s threshold is just over £10,000. The OTS argument discusses the competitive advantage that smaller businesses have over their registered competitors, especially if they are selling to the public (who can’t claim back VAT charged).
Add in the lack of compliance costs, collecting VAT and submitting returns to HMRC, and non-registered traders do seem to be having a quiet life.
There is also the cliff edge effect. If a small shop breaching the registration threshold for the first time, it must register, and if it can’t increase its prices to recover VAT charged it could suffer an immediate drop in profit of £14,000 if it has little or no input VAT to reclaim.
Secondly, did anyone notice that there was nothing about loss of higher rate tax relief for pension contributions?
Nevertheless, there is a bunch of tinkering in the actual budget and we can expect a reasonable addition to the UK tax code when the Finance Bill is published.
Perhaps we should be thankful that we all have the best part of 4 months to absorb the changes for 2018-19, at least the Chancellor has got that change right, the switch to an Autumn Budget.