One year to go?
Chancellors of the Exchequer have to pay attention to election dates. In a year’s time, George Osborne is likely to be presenting a Budget in the hope that it will contribute to his party winning the General Election in May 2015. Meanwhile, Labour’s Ed Balls will be proposing alternatives. Both have to tread a fine line between courting popularity and being so blatant about it that they lose credibility.
Mr Osborne, of course, has not courted much popularity in his time in office so far. This January, thousands of individuals had to file self-assessment returns for the first time because of his High Income Child Benefit Charge – clawing back the benefit from the higher earner, where one of a couple has income above £50,000 a year. As well as putting tax up for parents in that income bracket, it has increased the complexity of the tax system.
Mr Balls has recently suggested that Labour will, if given the chance, reintroduce the 50% top tax rate – a measure which, according to opinion polls, is supported by the majority of the population. Arguments continue about how much money it would raise, and how much damage it would do to the economy by deterring enterprise and investment.
Mr Osborne will be making the most of better economic news when he stands up to deliver this year’s Budget on 19 March. He will tell us that his medicine has been unpleasant, but is working. We’ll have to see if he eases the prescription at all for the next year.
Whatever he comes up with, we’ll be here to help you to negotiate the maze of tax rules and the unwelcome attentions of HM Revenue & Customs.