Taxbriefs Commentary Library

Budget 2013 – what’s left in the bag?

John Housden, 08 Feb 2013


 

If forward planning is a virtue, then it might be said that George Osborne is one of the most virtuous Chancellor we’ve had for some time. So much so, it may seem that there is hardly anything left for him  to announce in the Budget on 20 March. His Autumn Statement (on 5 December) seemed not only to pre-empt the forthcoming Budget, but also much of the content for the following two years. For example, we already know the 2015/16 IHT nil rate band (£329,000) and capital gains annual exempt amount (£11,100).

So in terms of tax numbers, most of the detail for 2013/14 is already out of the bag. On the other hand, no Chancellor will let their set piece of the year pass by without producing some surprises from the red box. In 2012 most of Mr Osborne’s surprises were greeted with generally negative publicity. The ‘omnishambles’ of the pasty tax, caravan tax and charity relief cap mean this year he will be especially cautious in his selection of new initiatives.  However, there is one proposal made by the Office of Tax Simplification (OTS) which could appeal to Mr Osborne, both as Chancellor and politician: the abolition of the 10% savings rate and a corresponding ISA limit increase.

In its report on simplifying pensioner tax the OTS said “Given the levels of confusion and the low level of take up, we would argue that this [10%] rate is not an effective incentive to save”.  The rate is a legacy of Gordon Brown’s final Budget, when he abolished a general 10% band that he had introduced in 1999 and, in doing so, gave a hospital pass to his successor, Alistair Darling. Mr Osborne might well relish resurrecting that piece of history on 20 March.

As usual with the Budget, like it or loathe it, you can’t ignore it.

To discuss your 2013 Budget requirements, please call us today on 020 7970 4141 or email clientservices@taxbriefs.co.uk
 

 


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John Housden

Editorial Consultant

John Housden is a qualified actuary who has worked in the personal financial services industry for 40 years.

A former technical director for a life company and longstanding contributor to a wide variety of Taxbriefs publications.

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