Will the 2015 Budget amount to anything?
The 2015 Budget date has already been set for Wednesday 18 March 2015. No doubt there will be the usual commotion in the media, but the question that has to be asked is whether we should be at all concerned by this. That may sound like an odd statement but let me explain. We have a general election on 7 May, seven weeks and one day after the Budget. Parliament will be dissolved on Monday 30 March; therefore, following the 2015 Budget, there will not actually be enough time to pass a Finance Bill through Parliament.
Further, George Osborne’s Autumn Statement at the beginning of December was saturated with proposed tax changes and economic comment. Clearly, he had in mind setting out an early economic and fiscal agenda in preparation for the General Election Campaign. So, although most of the changes that have already been announced may not come into effect before the election, they will no doubt be restated in his Budget speech.
One of the key items in the Autumn Statement was the change to the way stamp duty land tax (SDLT) is calculated for residential property. The previous rules, know as the ‘slab’ system, provided that if the purchase of your property was less than £250,000, you paid SDLT at 1% on the whole purchase price. However, if the purchase price equalled or exceeded £250,000, the 3% rate applied, not just to the excess over £250,000 but to the whole price. With rising property prices affecting many regions, this was extremely unpopular.
Under the new rules announced in December, higher rates are only payable on the portion of the purchase price that is within that band. The legislation for this is in a separate SDLT Bill currently going through Parliament and is very likely to become law before the General Election. For SDLT rates visit www.gov.uk/stamp-duty-land-tax-rates
There were a number of other changes that were announced which will no doubt also be reiterated in the Budget, including personal tax rates and allowances and individual taxpayers’ ability to pass ISAs on death to a surviving spouse or civil partner.
It would be cynical to suggest that the Chancellor has had an eye on the ‘silver haired’ vote when considering some of his welcome improvements to private pensions of late. Yet his apparent ‘wooing’ of this demographic in the Autumn Statement 2014 could be regarded as the beginnings of an early Election Campaign.
It may be that the Chancellor said it all in his Autumn Statement and that this forthcoming Budget will be relatively brief; chancellors in recent years have been in the habit of repeating ‘good news’, a practice started by Gordon Brown, so we can expect much of that. Furthermore, it would not be unreasonable to expect that the Chancellor will ‘dangle’ some other tax goodies to the electorate, these of course only seeing the light of day should his Government be re-elected.
Of course, a new Government could overturn some or all of this legislation, subjectively for better or worse; such is the nature of our political system. Let us hope that, whatever the outcome of the General Election, the changes in legislation already made should be retained insofar as they generally benefit individuals, business and the economy.
So, should we be concerned? I would suggest being more cautious, than concerned in celebrating the ‘to be implemented’ legislations from the Autumn Statement and any further ‘good news’ from the Budget. A waiting game it is indeed.
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