The Budget the Chancellor should be announcing

Desmond High takes a wry look at what the Chancellor of the Exchequer should – but won’t! – be announcing in his Budget.

Pensions – The debate about 40% tax relief etc is a complete waste of time. From April 2013 all tax relief on pensions will be abolished. Any cash drawn from a pension pot will be tax free. At the same time we’ll increase the ISA allowance to £25,000pa. That’s it. Forget annuities and nanny state stuff with incentives to save. You are all grown up enough to do your own saving.

VAT – It’s completely pointless the way companies registered for VAT charge VAT to other companies who are also registered for VAT. One pays it, the other reclaims it. That is a zero sum game and a hugely wasteful bureaucracy. So VAT is herewith scrapped, whatever the EU says, to be replaced by a simple sales tax on consumer purchases. It will also save Vince Cable any further embarrassment about not registering for VAT when he should have done.

National Insurance – No politician has ever had the guts to tell you saps that this is just another tax. There is no separate fund for pensions or the NHS. There, I said it! I also said two years ago we were examining how to get rid of it and that we’d take five years to do so. Actually it took 10 minutes to sort out, so from April 2013 it goes. Finito! Employers can use the saving on their contributions to take on more staff, and take them off the unemployment register. Unemployment solved at a stroke.

Income Tax – Ridiculously complicated. £10k income tax free each (a sop to Nick and Vince there), then 10% on next the £10k, £20% on the next £20k, 30% on the next £30k and 40% thereafter. Net effect is to put cash back in your pockets. Guess what. You’ll spend it on products or services which will create activity and wealth.

Support for SMEs – This is all over the place. So we’ll scrap all public sector “support” and any business less than three years old will get tax credits for any expenditure on sales and marketing activity, and on R&D, to get them up and running. After three years – good luck!

And a few snippets.

HMRC will stop referring to you as customers, when we all know you have no choice.

If you want to work in the public sector you can use a personal service company and have an annual renewable contract. Just don’t expect any pension or employment protection. Certainly suits us at the Treasury.

And finally, just for fun, we are setting up another Competition Commission, so they can compete for business!

March 2012