Leading accountants from Blick Rothenberg have outlined what they want to see from the Chancellor in next week’s Spring Budget, and why.
The firm’s newsroom is up-and-running, providing tax commentary, technical analysis and an interview service for journalists before, during and after the Spring Budget on Wednesday 8th March.
However, the accountants are already looking at what Chancellor Philip Hammond could, should and shouldn’t do:
- Should extend the Lifetime ISA to people over the age of 40, so that they can still open one and help save towards their retirement.
- Should extend the time that someone can contribute to a Lifetime ISA to retirement age, not 50.
- Should reintroduce tax relief on mortgage interest, but for first time buyers of properties under £450,000 in Greater London and £250,000 elsewhere, to help offset the cost of buying their first home.
Accountants Explain What they Want to See in the Spring Budget
- Should scrap the phased reduction of the pension annual allowance; people need to be encouraged to save for the future in order to be self-sufficient in retirement and not rely on the state pension. This could be simplified by making the pension allowance a flat £25,000 and the ISA allowance also a flat £25,000 for everyone; taxation is a less volatile component over the personal lifecycle.
- Could cap the amount that can be withdrawn from pensions tax-free at retirement.
Property/Stamp Duty Land Tax (SDLT)
- Should use the tax system to boost the supply of affordable housing by introducing capital taxation reliefs to incentivise landowners and developers to assist local authorities in meeting their affordable housing targets.
- Should allow mortgage interest tax relief for landlords that supply low cost/affordable housing.
- Should introduce a 20% Capital Gains Tax (CGT) rate on property sales made to first time buyers of properties worth less than £450,000 in Greater London and £250,000 elsewhere.
- Should scrap SDLT and CGT/Corporation Tax on the sale of land for residential development where the landowner/developer jointly works to meet local authorities’ targets on affordable housing numbers. This could be extended to all land where reasonable mixed use is evident, such as shops, schools and doctors’ surgeries. No distinction between greenfield and regeneration land, but greenbelt land should remain subject to tax. Truly redundant commercial buildings, such as telephone exchanges, ex-airfields, mills, etc. should also be converted or developed into housing.
- Should significantly increase the 10% threshold for SDLT from £925,000 to £1.5m, or even £2m (to the sort of level originally regarded as mansion tax).
National Insurance (NI) and Income Tax
- Could align NI and Income Tax rates so the least well off are taken out of paying NI.
- Could increase employers’ NI to 15% on salaries paid to executives over £150,000 per year, to try to discourage corporates paying most of the wages to a few highest paid employees.
- Could decrease employers’ NI to 10% on salaries paid to employees on the living wage, to both encourage employers to pay the living wage and help offset the cost.
- Could further accelerate Corporation Tax payment dates for the largest companies.
- Could reduce Corporation Tax further to encourage businesses to establish in the UK. The quid pro quo to this is that HM Revenue & Customs (HMRC) might increase the Corporation Tax rate for investment companies to keep the overall yield, particularly those holding fixed asset real estate.
What do you want to see in the Spring Budget next week? Both the RLA and NLA have issued their own wish lists already.