I missed the live reading of the budget as I had something more important to do, to wit helping a client. When I emerged from the meeting to check the newsfeed, the first bite sized piece of information proffered was that it contained 77 separate measures. This caused ice to form on my upper slopes. The thing with politicians – of all mainstream parties – is that they all believe that they can effect significant change, particularly if they are seen to “do something”, or even better 77 things. The reality is that the weather systems of the global economy, combined with the unwillingness of vested interests to countenance real change, mean that individual ships of state can rapidly be blown off course, particularly when they are rendered top-heavy by debt and thereby become hard to manoeuvre.
This is not to say that measures within the gift of the officers on the watch should not be taken, and the objective of reducing the deficit with a view to its eventual elimination is undoubtedly a laudable one, but to add further layers of complication to the most complex tax system the world has ever seen would seem to be just “doing something”.
For all the tinkering with taxes, the greatest effect on many small businesses will be the generous increases in small business rate relief, which gives a significant cash boost to hundreds of thousands of small businesses when the measure come into effect just over a year from now. Otherwise, even apparently good news such as the headline fall in capital gains tax was soured for some by the small print stating rather predictably that it would not apply to residential property. There was relief for those saving for retirement that the much feared attack on pension planning did not occur, but this is rather like the school bully looking generous by announcing that he had decided not to beat you up after all. The fall in corporation tax rates over the next few years is unequivocally good news, but for many businesses which require heavy investment in plant and machinery it won’t compensate for the recent reduction in Annual Investment Allowance.
At the end of the day the world economy will dictate the business environment in which we live. In the words of James Bond villain Mr White, “you’re a kite dancing in a hurricane, Mr Bond”.